McClandon v. Rosewell

FOURTH DIVISION
September 24, 1998



No. 1-97-1968

JOEANN McCLANDON, ) APPEAL FROM THE
) CIRCUIT COURT OF
Plaintiff-Appellant, ) COOK COUNTY.
)
v. )
)
EDWARD J. ROSEWELL, Cook County )
Treasurer, as Trustee of the )
Indemnity Fund created by )
Section 21-295 of the Property ) HONORABLE
Tax Code, ) MICHAEL J. MURPHY,
) JUDGE PRESIDING.
Defendant-Appellee. )

PRESIDING JUSTICE SOUTH delivered the opinion of the court:

This action arises from a claim by plaintiff for indemnity
against defendant, seeking recovery pursuant to section 21-295
through 21-305 of the Property Tax Code (35 ILCS 200/21-295
through 21-305 (West 1994)). After a bench trial, the court
entered judgment in favor of defendant from which this appeal is
taken.
Plaintiff, Joeann McClandon, is a professional real estate
investor who has attended several of the Cook County Collector's
annual scavenger tax sales and has purchased delinquent taxes at
those sales on numerous occasions. She acquired tax deeds on
several properties originally purchased at the Collector's annual
or scavenger sales. Plaintiff has 16 years of formal education.
In her capacity as a tax buyer, plaintiff attended the 1984
Collector's annual delinquent tax sale and purchased, among other
properties, the delinquent taxes on 9021 South Bishop in Chicago
(the subject property) for $560.17. She paid the subsequent
years' taxes on the subject property and filed a petition for tax
deed under case number 88 COTD 1203. After a hearing, plaintiff
received an order directing the County Clerk to issue her a tax
deed on that property. On September 12, 1988, plaintiff recorded
that tax deed as document number 88414148 with the Cook County
Recorder of Deeds. After recording that tax deed, plaintiff
never paid additional real estate taxes on that property.
Shortly after she received a tax deed, plaintiff was named
as a party in a federal bankruptcy case filed by the previous
owners of the subject property, Levander and Elnora McKeever. In
the Bankruptcy Court, the McKeevers attempted to have the
issuance of the tax deed voided as a fraudulent transfer under
section 555(h) of the Bankruptcy Code (11 U.S.C. 522(h)). The
Bankruptcy Court rejected the McKeever's arguments finding that
the tax sale could not be avoided pursuant to the trustee's
strong-arm powers. In re McKeever, 166 B.R. 648 (U.S.B.C., N.D.
Ill. 1994). In an earlier reported decision in the same case,
the Bankruptcy Court rejected the McKeever's attempt to avoid the
transfer by tax deed based on a lack of "reasonably equivalent
value". In re McKeever, 132 B.R. 996 (U.S.B.C., N.D. Ill. 1991).
The 1988 taxes on the subject property were sold to National
Indemnity Corporation (National), at the Collector's 1988 annual
sale on March 13, 1990, after plaintiff failed to pay those
taxes. National subsequently assigned its certificate of
purchase to Urban Visions, Inc. Urban Visions paid the
subsequent years' taxes which included the 1988 second
installment, 1989, 1990 and 1991 taxes after plaintiff failed to
pay those amounts as well. Prior to the expiration of the period
of redemption, Urban Visions filed its petition for tax deed as
92 COTD 3217 in the circuit court of Cook County. After filing
its petition for tax deed, Urban Visions served or attempted to
serve notice upon the appropriate parties, including plaintiff.
The tax deed file indicated that the Cook County Sheriff
attempted service on plaintiff five times at her home and several
times at other locations. Prior to the expiration of the
redemption period, plaintiff had several conversations with Mary
Cruz, an employee of National and Urban Visions, about the sale
of the 1988 delinquent taxes to National, and the subsequent
assignment to Urban Visions. Following a hearing, the court
issued an order directing the County Clerk to issue a tax deed to
Urban Visions, dated July 14, 1993.
Following the issuance of the tax deed to Urban Visions,
plaintiff filed an emergency motion to stay enforcement of the
tax deed. That motion was denied. Shortly thereafter, plaintiff
filed suit against defendant, as trustee of the Indemnity Fund,
pursuant to section 21-295 through 21-305 of the Property Tax
Code. Plaintiff alleged in her petition for indemnity that she
was not served with any of the notices required to be served upon
her by sections 263 and 266 of the Revenue Act of 1939, as
amended. The petition for indemnity was initially dismissed for
want of prosection; however, plaintiff came to court on a motion
to vacate the dismissal, which was granted.
At trial, plaintiff presented two witnesses, herself and her
expert witness as to the value of the subject property.
Defendant tendered Mary Cruz and Ronald Banks, the administrative
assistant to the Cook County Clerk's Director of Real Estate Tax
Services. Following arguments, the court entered judgment in
favor of defendant finding that plaintiff contributed to the loss
of the subject property through her negligence and fault, that
she failed to pay taxes on the subject property and failed to
protect her interest in the subject property despite knowledge of
the consequences of failing to pay real estate taxes. The court
also found that plaintiff was aware of the notice-serving
provisions of the Code, and that she failed to notify the
Collector of her new mailing address for purposes of giving her
notice of regular tax payments and the tax deed case. The court
additionally found that plaintiff knew of the tax delinquency on
the subject property as she sought the advice of counsel with
respect to the same problem. Finally, the court found that
plaintiff spoke with Cruz before the tax deed issued and that she
was on notice of the pendency of the tax sale and all the
consequences that arise therefrom.
Plaintiff later filed a motion for reconsideration. The
court found no reason to overturn its initial ruling and the
motion was denied. Shortly thereafter, she filed a motion to
consolidate the tax deed case in which Urban Visions obtained the
deed to the subject property with her petition for indemnity.
The court denied this motion finding that it lost jurisdiction of
the petition for indemnity when the notice of appeal was filed
and further, that it had been more that 30 days since the
issuance of a final ruling in the tax deed case and, thus, the
court had no jurisdiction to take action on that matter.
Plaintiff now argues that the lower court's decision finding
that she lost title to the subject property through her own fault
or negligence is contrary to the manifest weight of the evidence.
A trial court has broad discretion in determining whether a
residential owner whose property is sold for nonpayment of taxes
is entitled to compensation and the trial court's conclusion
should not be disturbed on review absent an abuse of discretion.
Kirk v. Rosewell, 225 Ill. App. 3d 326, 329, 587 N.E.2d 1214,
1216 (1992). That discretion is abused only where no reasonable
man would take the view adopted by the trial court. Kirk, 225
Ill. App. 3d at 329-30, 587 N.E.2d at 1214. The trial court's
judgment will not be overturned unless it is against the manifest
weight of the evidence. Application of Cook County Collector
(Ella Walker), 174 Ill. App. 3d 981, 985, 529 N.E.2d 570, 573
(1988). In order for a finding to be contrary to the manifest
weight of the evidence, an opposite conclusion must be clearly
apparent. Application of County Collector (Elizabeth M. Miller),
59 Ill. App. 3d 494, 499, 375 N.E.2d 553, 557 (1978).
Section 21-305 of the Property Tax Code provides:
"(a) Any owner of property sold under any
provision of this Code, who without fault or
negligence of his or her own sustains loss or
damage by reason of the issuance of a tax deed ***
and who is barred or in any way precluded from
bringing an action for the recovery of the
property or any owner of property containing 4 or
less dwelling units who resided thereon the last
day of the period of redemption who, in the
opinion of the Court which issued the tax deed
order, is equitably entitled to just compensation,
has the right to indemnity for the loss or damage
sustained. Indemnity shall be limited to the fair
cash value of the property as of the date that the
tax deed was issued, less any mortgages or liens
thereon." 35 ILCS 200/21-305 (West 1994).

In construing the meaning of "without fault or negligence",
the court in Garcia v. Rosewell, 43 Ill. App. 3d 512, 357 N.E.2d 559 (1976) directed that:
"[A] party need not be totally blameless, but the
person claiming the asserted right must not have
purposely failed in a duty or engaged in conduct
that materially contributed to the problem
complained of." Garcia, 43 Ill. App. 3d at 517,
357 N.E.2d at 563.

While the Indemnity Fund was established to remedy the
sometimes harsh results occasioned by a tax lien foreclosure
proceeding (In re Application of Cook County Treasurer (Heritage
Standard Bank), 185 Ill. App. 3d 701, 704, 542 N.E.2d 15 (1989)),
it was not designed to compensate property owners who contributed
to the loss of their property. Here, the evidence shows that
plaintiff has 16 years of education; was a professional tax
buyer; had acquired the subject property through a tax deed; had
acquired other properties through tax deeds; owned at least eight
other properties in 1990; spoke to representatives of National
regarding redemption; and sought the advice of an attorney with
regard to the subject property. The manifest weight of the
evidence supports the trial court's finding that plaintiff
contributed to the loss of the subject property through her
negligence and fault and, thus, the trial court properly denied
her request for an indemnity award.
As to plaintiff's argument that she did not receive proper
notice of the pendency of the tax deed proceedings being made by
Urban Visions under section 2-1401 of the Code of Civil Procedure
(735 ILCS 5/2-1401 West 1994), plaintiff had two years from July
14, 1993, the date that she was divested of her property, to file
a petition with the court. She did not take such an action, and
cannot now raise the issue of adequacy of notice.
For the foregoing reasons, the judgment of the circuit court
is affirmed.
Affirmed.
McNAMARA and CERDA, JJ., concur.