In re Application of the County Treasurer ( 2017 )

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Illinois Official Reports Reporter of Decisions
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Appellate Court Date: 2017.08.16
13:28:52 -05'00'
In re Application of the County Treasurer & ex officio County Collector,
2017 IL App (1st) 152951Appellate Court In re APPLICATION OF THE COUNTY TREASURER AND
Caption ex officio COUNTY COLLECTOR for Order of Judgment and Sale of
Land and Lots Upon Which All or Part of the General Real Estate
Taxes Are Delinquent, Including General and Special Taxes, Costs,
and Interest, Pursuant to the Illinois Property Tax Code (Alliance
Partners, Ltd., an Illinois Corporation, Petitioner-Appellee, v. William
Monroe and Caroline Reed, Intervenors-Appellants).
District & No. First District, Second Division
Docket No. 1-15-2951
Rule 23 order filed March 31, 2017
Motion to
publish allowed May 11, 2017
Opinion filed May 16, 2017
Decision Under Appeal from the Circuit Court of Cook County, No.
Review 14-COTD-002365; the Hon. Susan Fox Gillis, Judge, presiding.
Judgment Reversed in part, vacated in part, and remanded.
Counsel on Jones Day, of Chicago (Morgan R. Hirst, Daniel V. Bradley, and
Appeal Veronica K. Couzo, of counsel), for appellants.
Carter Legal Group, P.C. (Terry J. Carter and Eric H. Wudtke, of
counsel), and Law Offices of Heather Ottenfeld (Heather A.
Ottenfeld, of counsel), both of Chicago, for appellee.
Panel JUSTICE NEVILLE delivered the judgment of the court, with
opinion.
Justices Pierce and Mason concurred in the judgment and opinion.
OPINION
¶1 After the circuit court entered an order directing the county clerk to issue a tax deed to
Alliance Partners, Ltd., two occupants of the property subject to the deed filed a petition to
intervene, alleging that they received no notice of the proceedings for a tax deed and asking the
court to vacate the order for a tax deed. We hold that the trial court abused its discretion when
it dismissed the petition to intervene without holding an evidentiary hearing and the court erred
by dismissing the petition to vacate the order for a tax deed without an evidentiary hearing. We
reverse and remand for further proceedings in accord with this order.
¶2 BACKGROUND
¶3 On January 8, 2014, Thomas Soriano purchased a property in Chicago at a scavenger sale
for unpaid taxes. The property had three commercial units and twelve residential units. Soriano
transferred his interest in the property to Alliance. On July 2, 2014, Alliance filed a petition for
a tax deed to the property. Alliance served notice of the petition on the owners, two
commercial tenants, and an entity called “Ross Management,” which Alliance served with
process at an address in Glen Ellyn, Illinois. No one responded to the petition.
¶4 On December 11, 2014, Alliance filed an application for an order directing the county clerk
to issue a tax deed for the property. At the hearing on the application, held January 8, 2015,
Judd Harris, an attorney for Alliance, testified that no one had redeemed the property and the
redemption period had expired. Harris said, “There was a company called Ross Management
that has a sign at the subject property. And so we directed service to them.” He added,
“[W]e also observed that the residential units are completely vacant in this building.
*** [T]he residential units appeared to be completely vacant when we visited that
property.”
¶5 The circuit court, on February 23, 2015, entered an order directing the county clerk to issue
a tax deed for the property to Alliance. Two months after the hearing on the application for a
tax deed, on March 9, 2015, Alliance filed an application for an order of possession for the
property. It sent notice of the hearing on the application to the owner, the two commercial
tenants, and to seven persons listed as residents of five separate residential units on the
property. Alliance offered no explanation for the conflict between the notice and Harris’s
testimony that the residential units were vacant. On March 27, 2015, the court entered the order
of possession Alliance sought.
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¶6 Alliance did not immediately seek to enforce the order of possession. On August 4, 2015,
Alliance filed a motion to extend the order of possession. William Monroe and Caroline Reed,
as occupants of the property, came to court to object to the motion. The court stayed
proceedings to allow Monroe and Reed to seek legal counsel.
¶7 On September 17, 2015, Monroe and Reed, with the assistance of counsel, jointly filed a
document titled “Petition for Leave to Intervene Instanter; Motion to Quash Service and
Vacate Order of Possession/Response to Plaintiff’s Motion to Extend the Order of
Possession,” seeking relief from the order for issuance of a tax deed under section 2-1401 of
the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2014)). They alleged that Monroe
lived in one unit on the property and Reed lived in a different unit on the property. Neither
received notice of the petition for a tax deed or the application for an order directing the clerk
to issue a tax deed. Reed admitted that on March 16, 2015, she received notice of the hearing
on the application for an order of possession, but she alleged that Soriano, acting as an agent
for Alliance, told Reed that she did not need to attend the hearing because Alliance would
permit all occupants to remain in the building.
¶8 Monroe alleged that he received no notice about the transfer of ownership or the order of
possession until July 23, 2015, when an agent working for Alliance sent notice of new
ownership. Monroe alleged that Soriano told Monroe that Alliance would send him a new lease
for his unit.
¶9 After hearing arguments on the motions, but hearing no evidence, the circuit court entered
an order dated September 18, 2015, in which the court upheld as valid the initial tax deed and
extended the order of possession. The court denied the petition of Monroe and Reed in all
respects, “except for leave to intervene for arguments made” on the date of the hearing,
September 18, 2015. The court additionally granted Monroe and Reed leave to file their
petition with signed supporting documents. Only the attorney for Monroe and Reed had signed
the petition, and the supporting documents bore no signatures. Monroe and Reed did not
amend the filed petition or the supporting documents. Instead, they filed a notice of appeal,
seeking reversal of the order denying them leave to intervene and vacatur of the order for a tax
deed and the order of possession.
¶ 10 ANALYSIS
¶ 11 Jurisdiction
¶ 12 Alliance argues that we lack jurisdiction over the appeal because the court did not finally
deny the petition to intervene. The bystander’s report for the hearing on September 18, 2015,
approved by the circuit court, states that on September 18, “the Court issued a final order on
the merits *** denying Mr. Monroe and Ms. Reed’s Petition to Intervene.” The court clarified
that Monroe and Reed had permission, as possible intervenors, to argue in favor of the petition
for intervention and for the other arguments made on September 18. The court also gave
Monroe and Reed an opportunity to supplement the record “by filing a signed copy of Mr.
Monroe’s unsigned affidavit that had been filed with the original Petition to Intervene.”
Because the court’s order denying leave to intervene also disposed of the section 2-1401
motion and finally disposed of all issues before the court, Supreme Court Rules 301, 303, and
304(b)(3) give this court jurisdiction to decide the appeal. See Ill. S. Ct. Rs. 301 (eff. Feb. 1,
1994), 303 (eff. Jan. 1, 2015), 304(b)(3) (eff. March 8, 2016); S.C. Vaughan Oil Co. v.
Caldwell, Troutt & Alexander, 181 Ill. 2d 489, 496-97 (1998); Velde Ford Sales, Inc. v. John
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Bearce Ford, Inc., 194 Ill. App. 3d 951, 952 (1990).
¶ 13 Petition to Intervene
¶ 14 Monroe and Reed argue that as occupants of the property, they have a statutory right to
intervene. See 735 ILCS 5/2-408(a) (West 2014). Section 2-408(a) of the Code of Civil
Procedure provides:
“Upon timely application anyone shall be permitted as of right to intervene in an
action: *** (2) when the representation of the applicant’s interest by existing parties is
or may be inadequate and the applicant will or may be bound by an order or judgment
in the action; or (3) when the applicant is so situated as to be adversely affected by a
distribution or other disposition of property in the custody or subject to the control or
disposition of the court or a court officer.” 735 ILCS 5/2-408(a)(2), (a)(3) (West 2014).
¶ 15 The circuit court has discretion to grant or deny a petition to intervene, and we will not
disturb the circuit court’s decision unless the court abused its discretion. City of Chicago v.
John Hancock Mutual Life Insurance Co., 127 Ill. App. 3d 140, 143 (1984). When a petitioner
seeks to intervene as a matter of right, “the trial court’s discretion is limited to determining
timeliness, inadequacy of representation and sufficiency of interest; once these threshold
requirements have been met, the plain meaning of the statute directs that the petition be
granted.” John Hancock, 127 Ill. App. 3d at 144. The circuit court held no evidentiary hearing
on the allegations of the petition to intervene. In accord with practice relating to motions to
strike pleadings, we take as true all well-pleaded allegations of the petition to intervene.
Strader v. Board of Education of Community Unit School District Number 1, 351 Ill. App. 438,
451 (1953); see Urbaitis v. Commonwealth Edison, 143 Ill. 2d 458, 475 (1991).
¶ 16 According to the allegations of the petition to intervene, Alliance first notified Reed of the
proceedings to transfer ownership in March 2015. Alliance’s agent, Soriano, told Reed the
proceedings would not affect her interest in the unit she rented. Monroe first received notice in
July 2015. Monroe and Reed appeared in court in August 2015 and obtained counsel who
helped them file their petition to intervene in September 2015. Alliance did not object to the
petition as untimely, and the circuit court did not find the petition untimely. We find that
Monroe and Reed timely filed their petition to intervene. See John Hancock, 127 Ill. App. 3d at
144.
¶ 17 As occupants of the property, Monroe and Reed have interests that give them a statutory
right to notice of proceedings for a tax deed. 35 ILCS 200/22-10 (West 2014); In re
Application of the County Treasurer, 347 Ill. App. 3d 769, 778 (2004). The order for
possession and subsequent eviction notice sufficiently show a potential adverse effect of the
judgment on the interests of Monroe and Reed. For each, the “possessory interest in a unit of
the subject building, is more tangible and immediate than the interest of the public at large.”
John Hancock, 127 Ill. App. 3d at 146. Accordingly, we find that Monroe’s interest in the
property and Reed’s interest in the property give them a right to intervene in the proceedings.
¶ 18 The owners made no effort to protect any interest in the property. No one other than
Monroe and Reed opposed Alliance or represented the property’s occupants. Thus, Monroe
and Reed sufficiently alleged that no party adequately represented their interests. Because
Monroe and Reed adequately pleaded facts that met the requirements of section 2-408(a), the
circuit court abused its discretion when it denied their petition for leave to intervene in the
proceedings without hearing any evidence to rebut the allegations of the petition. Accordingly,
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we reverse the order of September 18, 2015, insofar as the circuit court denied the petition for
leave to intervene. Citicorp Savings of Illinois v. First Chicago Trust Co. of Illinois, 269 Ill.
App. 3d 293, 299 (1995).
¶ 19 Section 2-1401 Petition
¶ 20 The circuit court also denied Monroe and Reed’s petition insofar as they sought relief from
the judgment awarding Alliance a tax deed to the property. Monroe and Reed’s interests in the
property give us jurisdiction to consider their appeal from the denial of the section 2-1401
petition. Citicorp Savings, 269 Ill. App. 3d at 299-300.
¶ 21 When a section 2-1401 petitioner seeks to vacate a judgment as void, the petition presents a
purely legal issue, and we review the denial of the petition de novo. Warren County Soil &
Water Conservation District v. Walters, 2015 IL 117783, ¶ 47. “Because we are called upon to
review the trial court’s dismissal of the section 2-1401 petition, we must assume the truth of
the uncontradicted factual allegations contained in the section 2-1401 petition.” Cartwright v.
Goodyear Tire & Rubber Co., 279 Ill. App. 3d 874, 883 (1996).
¶ 22 A section 2-1401 petitioner may obtain relief from an order for a tax deed (1) if the tax
purchaser or his or her assignee obtained the tax deed by fraud or deception or (2) if a party
holding a recorded interest in the property was not named as a party in the publication notice
and 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(4) (West 2014).
¶ 23 According to the petition, Monroe and Reed lived on the property. Harris testified that “the
residential units are completely vacant in this building” and “the residential units appeared to
be completely vacant.” Less than two months later, he sent notices to seven persons identified
as tenants of five separate units on the property. The allegations and the evidence support the
inference that Harris testified deceptively, in that when he testified in January 2015, he
apparently knew either that he had done no investigation that would have discovered if any of
the units still had occupants, or that the property still had several occupants.
¶ 24 Alliance argues that it did not act deceptively because it provided notice in accord with the
statute when it sent notice of proceedings to Ross Management in Glen Ellyn. See 35 ILCS
200/22-15 (West 2014). We do not see how such notice excuses apparently false testimony
from its witness.
¶ 25 Moreover, Harris’s testimony does not show compliance with notice requirements of
section 22-15. Section 22-15 provides that “[i]f the property sold has more than 4 dwellings or
other rental units, and has a managing agent or party who collects rents, that person shall be
deemed the occupant and shall be served with notice instead of the occupants of the individual
units.” 35 ILCS 200/22-15 (West 2014). Harris testified that “There was a company called
Ross Management that has a sign at the subject property.” Alliance presented no evidence that
Ross Management collected rents for the property. Alliance presented no evidence of what the
sign at the property said.
¶ 26 “Whether an individual has the status of managing agent depends on several factors,
including whether the interests of the individual ‘are identified with those of his principal and
on the nature of his functions, responsibilities and authority ***.’ ” Crimm v. Missouri Pacific
R.R. Co., 750 F.2d 703, 708 (8th Cir. 1984) (quoting Terry v. Modern Woodmen of America,
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57 F.R.D. 141, 143 (W.D. Mo. 1972)). Ross did not respond to the notices it received. Alliance
presented no evidence that Ross acted as managing agent for the property. Merely leaving a
sign on a property does not make one a managing agent for the property. See City of Mattoon v.
Mentzer, 282 Ill. App. 3d 628, 630-31, 636 (1996). Thus, Alliance has not shown compliance
with sections 22-10 and 22-15 of the Property Tax Code. 35 ILCS 200/22-10, 22-15 (West
2014).
¶ 27 We find that Monroe and Reed adequately alleged grounds to have the court vacate the
order for the tax deed, pursuant to section 2-1401. Therefore, we reverse the dismissal of
Monroe and Reed’s section 2-1401 petition. Because the order for possession depends on the
validity of the order for tax deed (35 ILCS 200/22-40(c) (West 2014)), we vacate the order for
possession and remand for further proceedings on the petition to intervene and for relief under
section 2-1401.
¶ 28 CONCLUSION
¶ 29 Monroe and Reed filed a timely petition for leave to intervene, and in the petition they
sufficiently alleged facts showing that they meet the requirements of section 2-408(a) for
intervention as of right. The circuit court abused its discretion when it denied the petition to
intervene. The petition also included allegations that support the inference that Alliance failed
to comply with the notice requirements stated in section 22-10 of the Property Tax Code and
that Alliance presented arguably false testimony to persuade the court to order the clerk to
issue a tax deed. Accordingly, we reverse the dismissal of the section 2-1401 petition to vacate
the order for the tax deed. We also vacate the order of possession, and we remand for
proceedings in accord with this order.
¶ 30 Reversed in part, vacated in part, and remanded.
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