In re Application of the County Treasurer and Ex Officio County Collector of Cook County Illinois

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State: Illinois

Court: 1st District Appellate

Docket No: 1-08-1445 Rel

Case Date: 04/30/2009

Preview:FOURTH DIVISION April 30, 2009

No. 1-08-1445

In re THE APPLICATION OF THE COUNTY TREASURER AND Ex Officio COUNTY COLLECTOR OF COOK COUNTY ILLINOIS, FOR JUDGMENT AND ORDER OF SALE AGAINST REAL ESTATE RETURNED DELINQUENT FOR THE NONPAYMENT OF GENERAL TAXES AND SPECIAL ASSESSMENT FOR THE YEARS 2002 AND PRIOR YEARS. (Z Financial, LLC, Petitioner-Appellant, v. Ryan Dunn, Respondent-Appellee.)

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Appeal from the Circuit Court of Cook County No. 2007 COTD 359 The Honorable Paul A. Karkula, Judge Presiding.

JUSTICE GALLAGHER delivered the opinion of the court: Petitioner Z Financial, LLC, appeals both the trial court's granting of equitable redemption in a tax deed sale proceeding to the property's owner Ryan Dunn, and the trial court's denial of a motion to expunge the redemption. On appeal, Z Financial claims that the

1-08-1445 trial court erred in granting equitable redemption because Dunn failed to tender funds redeeming the property within the statutory period of redemption provided under the Property Tax Code (Code) (35 ILCS 200/21-350 (West 2006)). Z Financial also contends on appeal that equitable relief was erroneously granted because Dunn had an adequate remedy of law under the Code by tendering under protest the funds required to redeem the property within the statutory redemption period. 35 ILCS 200/21-380 (West 2006). For the reasons that follow, we reverse. Z Financial purchased the delinquent real estate taxes for the year 2002 on June 3, 2004, for property located at 4654 W. Washington Boulevard, Chicago, Illinois (property). Z Financial received a certificate of purchase relating to the June 3, 2004, transaction. The first installment of the 2003 real estate tax was due on March 1, 2004. Z Financial paid the 2003 first installment on September 13, 2004. Dunn then paid this installment on September 24, 2004. The first installment of the 2005 real estate tax was due on March 1, 2006. Z Financial paid the 2005 first installment on April 6, 2006. Dunn then also paid this installment on April 6, 2006, approximately 2 hours and 15 minutes after Z Financial's payment. On January 24, 2007, Z Financial filed a petition for tax deed since delinquent taxes were not redeemed within the statutory redemption period. The tax deed asserted that the extended time for redemption would expire on June 1, 2007. Pursuant to Dunn's request, the Cook County clerk's office (clerk) on April 17, 2007, prepared an estimate of cost of redemption (hereinafter, estimate) to redeem the property. The estimate included the subsequent taxes Z Financial paid after purchasing the 2002 delinquent taxes, which included the first and second installments for 2003 and 2004 and the first installments for 2005 and 2006. The estimated cost to redeem the property was $106,175.76. The prepared estimate reflected that the extended redemption date was June 1, 2007. On the day 2

1-08-1445 that Dunn received the estimate, he discussed the estimate with a clerk employee and informed the employee that even though he paid the first installment of the 2003 and 2005 taxes and the second installment of the 2003 tax, those taxes were included on the estimate. The clerk instructed Dunn to pay the amount reflected on the estimate and that procedures existed to receive a refund for overpayments. On the last day of redemption on June 1, 2007, Dunn tendered funds to a clerk employee to pay the estimate. The tendered funds were for an amount less than that on the estimate. Dunn deducted the first installment taxes for 2003 and 2005 and the second installment for 2003. The clerk employee refused to adjust the estimate to reflect payments for the taxes Dunn previously paid and refused to accept tender of funds for an amount less than the amount reflected on the estimate. Z Financial filed on June 28, 2007, an application for an order directing the clerk to issue a tax deed asserting that the redemption period relating to the tax sale expired on June 1, 2007, and the property was not redeemed. Dunn filed on June 29, 2007, a motion to extend redemption. In this motion, Dunn asserted that he notified the clerk that he paid the first and second installments for 2003 and the first installment for 2005, but the clerk refused to adjust the estimate to reflect the payments Dunn made for those installments. Dunn alleged that the clerk erred in calculating the amount due on the estimate. Z Financial filed a motion under section 2-615 of the Code of Civil Procedure (735 ILCS 2-615 (West 2006)) to dismiss the motion to extend redemption on August 14, 2007, asserting that Dunn had no statutory authority to extend the redemption period. Z Financial also claimed that the clerk did not err in preparing the estimate because Z Financial paid the taxes before 3

1-08-1445 Dunn made a duplicate payment of the taxes. Z Financial also asserted that the Code allows only the certificate of purchase holder, Z Financial, to extend the redemption period. 35 ILCS 200/21-385 (West 2006). The trial court ruled on September 17, 2007, that given the clerk's error in preparing the estimate, Dunn made a bona fide attempt to redeem the property within the redemption period. The trial court's order also stated the estimate did not correctly credit the amount of taxes that Dunn paid for the first installment of taxes for 2003 and 2005 and found that the estimate was erroneous. The trial court in the order acknowledged that it lacked the authority to extend the redemption period, but the trial court stated that it would not approve an application for a tax deed if presented under these circumstances. Dunn filed a motion in opposition of petition for tax deed on October 9, 2007, asserting again that the amount reflected on the estimate was erroneous since the estimate failed to include a credit for the installments that Dunn paid. Z Financial filed a response to the motion in opposition of petition for tax deed on November 13, 2007. Z Financial asserted that the first installment of the 2003 tax became delinquent on March 1, 2004, and Z Financial paid the installment on September 13, 2004. The first installment of the 2005 tax was due on March 1, 2006, and Z Financial paid the installment on April 6, 2006. Z Financial alleged that the clerk properly included those installments on the estimate because Z Financial paid the delinquent taxes before Dunn paid the taxes. Z Financial claimed that Dunn's failure to pay the taxes caused his failure to redeem the property, and the trial court erred in finding that Dunn made a bona fide attempt to redeem the property within the statutory period.

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1-08-1445 A hearing on the petition for tax deed was held on December 5, 2007. The trial court continued the matter to January 9, 2008. The trial court entered an order on January 9, 2008, ruling in part that "based on the appellate court ruling in Hawkeye v. Lanz, the court equitably grants respondent Dunn 14 days from receipt of estimate of redemption of 6/1/07 Re 2002 sale on 16-10-325-013 to redeem said taxes." The trial court also directed the clerk to prepare an estimate. Dunn redeemed the property on January 15, 2008. On January 28, 2008, the trial court entered an order granting to Z Financial 14 days to file a petition to expunge the redemption made by Dunn, which Z Financial filed on February 25, 2008. Dunn filed its answer to the petition on March 18, 2008. The trial court denied the petition to expunge on May 1, 2008. Z Financial timely appealed. Both parties agree that the applicable standard of review is de novo. We will adopt a de novo standard of review to the extent that we are required to interpret the Code (35 ILCS 200/11, et seq. (West 2006)) to determine whether Dunn adhered to the Code's provisions in tendering payment to redeem the property. See Alvarez v. Pappas, 229 Ill. 2d 217, 220, 890 N.E.2d 434, 437 (2008). We will employ an abuse of discretion standard to determine whether the trial court erred in granting equitable relief to Dunn by extending the period of redemption. In re Application of the County Treasurer, 378 Ill. App. 3d 842, 854, 881 N.E.2d 576, 587 (2007) (Hawkeye). Z Financial first contends on appeal that the trial court erred in allowing Dunn to redeem the property months after the statutory redemption period expired. Z Financial claims that Dunn had three years or until June 1, 2007, to redeem, but Dunn deposited redemption funds on January 15, 2008, more than 3

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