No. 3-04-0777

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2005

The circuit court of McDonough County entered an orderdirecting issuance of a tax deed to petitioner H & H Investments. Two months later, respondent Green Tree Financial ServicingCorporation (Green Tree), f/k/a Conseco Finance ServicingCorporation (Conseco), filed a petition to vacate the deed,alleging that it did not have notice of the petition. The trialcourt granted Green Tree's petition, concluding that H & HInvestments failed to fulfill the notice requirements of theProperty Tax Code (35 ILCS 200/22-5 et seq. (West 2002)). Weaffirm.

In 1998, Roger and Judy Wilson purchased real estate locatedat 137 East James Drive in Macomb, Illinois. The property wasmortgaged to Green Tree for $112,764, and Green Tree recorded itsinterest in the McDonough County recorder's office. On November 1,1999, Green Tree changed its name to Conseco Finance ServicingCorporation.

In October of 2000, H & H Investments purchased the propertypursuant to an order of judgment and sale against the real estatereturned delinquent for the non-payment of 1999 general propertytaxes. Three years later, H & H Investments began tax deedproceedings. To confirm those parties owning or otherwise havingan interest in the property, H & H Investments obtained a commitmentfor title insurance. The commitment was dated June 23, 2003, andrevealed that Green Tree held a mortgage in the property. On July7, 2003, H & H Investments filed a petition for the tax deed. Thetake notice was filed on July 11, 2003. Green Tree was served bycertified mail at its address listed on the mortgage on file in therecorder's office; 332 Minnesota Street, St. Paul, Minnesota.

According to the certificate of publication, notice was alsopublished once a week for three successive weeks in the Macombnewspaper. The certificate of publication of notice was filed onMarch 3, 2004, and is contained in the record on appeal. It is notverified or notarized. It was not completed by the publisher anddoes not include a written or printed copy of the notice aspublished.

The trial court entered an order directing issuance of the taxdeed to petitioner. Two months later, Green Tree filed a motion tovoid the tax deed or, in the alternative, a petition to vacate thetax deed pursuant to section 2-1401 of the Code of Civil Procedure(735 ILCS 5/2-1401 (West 2002)). In its petition, Green Treeclaimed that it changed its name to Conseco Financing ServiceCorporation during the relevant service period and that Conseco didnot receive timely notice of the tax deed petition.⁽¹⁾ Green Treenoted that the Revenue Act requires strict compliance with itsnotice requirements. Green Tree alleged that had the court knownthat Conseco had a registered agent it would have denied H & HInvestments application for the tax deed.

Both parties filed motions for summary judgment. H & HInvestments maintained that service was proper via certified mailsent to the address contained on the mortgage and by publication. Green Tree argued that H & H Investments' failure to serve Conseco'sregistered agent constituted fraud as a matter of law and that thetax deed should be vacated pursuant to section 22-45 of the PropertyTax Code (35 ILCS 200/22-45 (West 2002)). The trial court grantedGreen Tree's motion and entered a final order vacating the deed. H & H Investments claims that its failure to serve Conseco'sregistered agent did not require the trial court to vacate the taxdeed. It argues that notice sent by certified mail to the addresscontained on the mortgage of record was sufficient service under theProperty Tax Code.

Section 22-10 of the Property Tax Code provides that apurchaser shall not be entitled to a tax deed to the property soldunless he gives written notice of the sale and the date ofexpiration of the period of redemption to the owners, occupants andparties interested in the property. 35 ILCS 200/22-10 (West 2002). Additionally, the purchaser shall give notice of the petition toissue a tax deed by causing it to be published in a local newspaper. 35 ILCS 200/22-15 (West 2002); 35 ILCS 200/22-20 (West 2002). A taxbuyer must strictly comply with these notice requirements to obtaina valid deed. In re Application of the County Collector forJudgment and Order of Sale Against the Lands and Lots ReturnedDelinquent for the Nonpayment of General Taxes for the Year 1987 andPrior Years, 278 Ill. App. 3d 168, 662 N.E.2d 535 (1996) (D.S.Associates); Farlow v. Oliver, 29 Ill. 2d 493, 194 N.E.2d 262(1963).

Illinois courts have held that where an interested partypetitions to vacate a judgment granting a tax deed under section 2-1401, the interested party must prove fraud. Generally, absentfraud, tax deeds issued are uncontestable except on direct appeal. In re Application of the County Treasurer and Ex-Officio CountyCollector of Cook County Illinois for Judgment and Order of SaleAgainst the Estate Rendered Delinquent for the Nonpayment of 1980Taxes, 185 Ill. App. 3d 789, 542 N.E.2d 397 (1989). However, anallegation of fraud is not always required to successfully challengea tax deed in a section 2-1401 petition. Under section 22-45(4) ofthe Property Tax Code, interested parties may also petition tovacate a deed by showing that they were not named as a party in thepublication notice under section 22-20, and that the tax buyer didnot make a diligent inquiry or effort to serve them with the noticesrequired under section 22-10 through 22-30. 35 ILCS 200/22-45(4)(West 2002). The trial court's judgment may be sustained by areviewing court on any grounds supported by the record. D.S.Associates, 278 Ill. App. 3d 168, 662 N.E.2d 535.

In this case, the record is devoid of any evidence that noticeby publication was properly made on the owners and other interestedparties, including Conseco.

When any notice shall be required by law to be published in anewspaper, the certificate of the publisher is sufficient evidenceof the publication. 715 ILCS 5/1 (West 2002). The certificate mustbe completed by the publisher or an authorized agent, and a writtenor printed copy of the notice must be included. The certificatemust also contain the further certificate of the publisher, or anauthorized agent, stating that the newspaper is a newspaper definedby statute. 715 ILCS 5/1 (West 2002).

Here, the certificate of publication contained in the recorddoes not indicate that it was signed by an authorized agent of thenewspaper. It does not include a written copy of the publicationnotice. It does not contain a certificate of the publisher. Further, it was filed with the circuit clerk three months after thetax deed was issued. Accordingly, the certificate of publicationfails to meet the statutory requirements and is insufficientevidence of notice by publication.

The record also reveals that H & H Investments failed to makea diligent inquiry or effort to properly serve Conseco with notice.

Section 22-15 of the Property Tax Code provides that if anyinterest party "upon diligent inquiry and effort cannot be found orserved with notice in the county, then the person making the serviceshall send a copy of the notice by registered or certified mail ***to that party at his or her residence." 35 ILCS 200/22-15 (West2002). Section 2-204 of the Code of Civil Procedure states:

"Service on private corporations. A privatecorporation may be served (1) by leaving a copy of theprocess with its registered agent or any officer or agentof the corporation found anywhere in the State; or (2) inany other manner now or hereafter permitted by law." 735ILCS 5/2-204 (West 2002).

This provision applies to foreign as well as domestic corporations. Slates v. International House of Pancakes, Inc., 90 Ill. App. 3d716, 413 N.E.2d 457 (1980).

To the extent that the Property Tax Code does not regulatematters of procedure, the Code of Civil Procedure applies. In reApplication of the Cook County Collector for Judgment and Order ofSale Against Lands and Lots Returned Delinquent for Nonpayment ofGeneral Taxes for the Year 1987 and Prior Years, 271 Ill. App. 3d12, 648 N.E.2d 153 (1995) (CNA Tax Investors). The Code of CivilProcedure states that in proceedings in which the procedure isregulated by other statutes, those other statutes control; butArticle II of the Code applies to matters of procedure not regulatedby other such statutes. 735 ILCS 5/1-108(b) (West 2002).

The Property Tax Code regulates the procedure regarding serviceof process of a tax deed on an interested party located outside thecounty. The Property Tax Code, however, refers only to a person'sresidence as the proper mode of such service. Thus, we must lookto the Code of Civil Procedure to determine what is appropriateservice on a corporation. Section 2-204 provides that the properperson to serve in a corporation, foreign or domestic, is itsregistered agent.

In this case, the record shows that H & H Investments failedto make a diligent inquiry to serve Conseco's registered agent inCook County. A "diligent inquiry" has been defined as "that kindof search or investigation which a diligent person, intent onascertaining a fact, would usually and ordinarily make." CNA TaxInvestors, 271 Ill. App. 3d at 15, 648 N.E.2d at 156. ProcuringGreen Tree's out-of-state address from the mortgage document doesnot constitute a diligent inquiry. See D.S. Associates, 278 Ill.App. 3d 168, 662 N.E.2d 535. All foreign corporations having theauthority to do business in this State must maintain a registeredagent on record with the Secretary of State. 805 ILCS 5/5.05 (West2002). The record fails to demonstrate any efforts by H & HInvestments to locate the corporation's registered agent within thisstate.

The general purpose of a section 2-1401 petition is to alertthe court to such facts existing at the time judgment was enteredthat would have precluded judgment had the court known of thosefacts. D.S. Associates, 278 Ill. App. 3d 168, 662 N.E.2d 535. H & H Investments failed to comply with the publication requirementof section 22-20 and the notice requirement of section 22-15. Thus,the trial court properly vacated the order directing issuance of thetax deed under section 22-45(4) of the Property Tax Code.

The judgment of the circuit court of McDonough County isaffirmed.

Affirmed.

BARRY, J., concurring and MCDADE, J., specially concurring inpart and dissenting in part.

JUSTICE McDADE, specially concurring in part and dissenting inpart:

_________________________________________________________________

The majority's conclusion that "the record is devoid of anyevidence that notice by publication was properly made on ***Conseco" (slip op. at 5) is based exclusively on section 1 of theNotice by Publication Act (715 ILCS 5/1 (West 2002)). I writeseparately to observe that the certificate of the publisher is notthe only or even the best evidence of publication. For example, Iwould not find insufficient evidence of publication if the publisherprovided live testimony rather than completing the certificate ofpublication, or if witnesses testified that they read the notice inthe appropriate paper on five consecutive days, or if authenticatedcopies of the published notice are filed. I also note that theNotice by Publication Act states only that the certificate of thepublisher is sufficient (i.e., "enough" (American HeritageDictionary 679 (1983))) evidence of publication. See also Hauganv. City of Chicago, 259 Ill. 249, 255 (1913) ("The affidavit andcertificate of publication are merely prima facie evidence, on whichthe court may or may not have acted in arriving at its finding, ina special assessment proceeding, that it had jurisdiction. Theremay have been other evidence submitted as to posting and publishingnotices").

I also have some concern about Green Tree's argument that thiscourt should find that H & H Investments did not comply with thenotice by publication requirements on the grounds H & H Investmentsused Green Tree's former corporate name in its publication. Thisargument raises a question as to whether Green Tree's multiple namechanges might be subterfuge for avoiding notice when it fails to payits taxes. Nonetheless, it appears the legislature intended strictcompliance with the Notice by Publication Act. H & H Investmentsfailed to provide the certificate of the publisher as required, orany other competent evidence that it complied with the Property TaxCode's notice by publication requirement. I therefore concur withthe majority's holding to the extent it finds that H & H Investmentsprovided insufficient evidence of notice by publication because thecertificate of publication, which was the only evidence submitted,failed to meet the statutory requirements of the Notice byPublication Act.

I disagree with the majority's conclusion that H & HInvestments failed to make a diligent inquiry or effort to properlyserve Green Tree with notice. The majority reasoned that, becausethe Property Tax Code "refers only to a person's residence as theproper mode of such service *** we must look to [section 2-204 ofthe Code of Civil Procedure] to determine what is appropriateservice on a corporation" (slip op. at 7)⁽²⁾. The majority thenconcluded that service is proper only on the corporation'sregistered agent. However, the majority admitted that "[t]heProperty Tax Code regulates the procedure regarding service ofprocess of a tax deed on an interested party located outside thecounty." Slip op. at 7. Therefore, its reasoning must assume thata corporation does not have a residence.

Green Tree does have a residence, and, therefore, H & HInvestments' only responsibility under the Property Tax Code (andnot the Code of Civil Procedure) was to "cause a copy of the noticeto be sent by registered or certified mail, return receiptrequested, to [respondent] at [its] residence, if ascertainable." 35 ILCS 200/22-15 (West 2002). Further, Green Tree's "residence"is not limited to the office of its registered agent. For example,under section 2-102 of the Code of Civil Procedure, "[a]ny privatecorporation *** is a resident of any county in which it has itsregistered office or other office or is doing business." (Emphasisadded.) 735 ILCS 5/2-102(a) (West 2002). Green Tree does not claimthat the address to which H & H Investments mailed notice was notone of its offices or a place where it was doing business. Themajority does not cite, nor do I believe exists, any authority thata corporation's sole residence is the office of its registeredagent. Accordingly, I would find that H & H Investments proved itprovided notice to Green Tree as required by the Property Tax Code.

For the foregoing reasons, I respectfully specially concur inpart and dissent in part.

1. At some point prior to filing its petition to vacate,Conseco changed its name back to Green Tree Servicing, LLC.

2. The Property Tax Code actually refers to a party's residence. Although the majoritydid not state that it turned from this section of the Property Tax Code to the Code of CivilProcedure because it felt this section excluded corporations, I note that it does not. See 35 ILCS200/22-15 (West 2002) ("If any owner or party interested, upon diligent inquiry and effort cannotbe found or served with notice in the county, then the person making the service shall cause acopy of the notice to be sent by registered or certified mail, return receipt requested, to that partyat his or her residence, if ascertainable").