Our panel of leading appellate attorneys reviews the four Illinois Supreme Court opinions handed down Thursday, June 17. In In re Application of Tax Deed, the court analyzed case-specific facts for purposes of determining whether section 22-85 of the Property Tax Code could be applied to void a tax deed. In Municipal Trust & Savings Bank v. Moriarty, the court construed section 2-202 of the Code of Civil Procedure to determine whether a private process server may serve process on a defendant in Cook County without first being appointed by the circuit court. In Roberts v. Alexandria Transportation, Inc., the court invoked its discretion and answered a question of law certified by the United States Court of Appeals for the Seventh Circuit, which asked “whether the obligation of a settling party is uncollectable pursuant to the Illinois Joint Tortfeasor Contribution Act.” In Walker v. Chasteen, the court addressed the constitutionality of section 15-1504.1 of the Code of Civil Procedure, as well as sections 7.30 and 7.31 of the Illinois Housing Development Act.
In re Application of Tax Deed, 2021 IL 126150
By Joanne R. Driscoll, Forde & O’Meara LLP
In this opinion, written by Justice Carter, with Justice Overstreet taking no part, the court analyzed case-specific facts for purposes of determining whether section 22-85 of the Property Tax Code (35 ILCS 200/22-85 (West 2020)) could be applied to void a tax deed.
The last known owner of the property died intestate, and his siblings (the Browns) became the owners. Real estate taxes owed in 2011 on mineral rights of the property were not paid, and the county collector sold the delinquent taxes in 2013. The purchaser assigned the tax sale certificate to the Castlemans who obtained an extension of the taxes’ redemption date to October 10, 2015. They also obtained a court order on October 19, 2015 that directed the county clerk to issue a tax deed to them pursuant to section 22-40(a) of the Property Tax Code. Thereafter, the Castlemans assigned the tax sale certificate to the Groomes, while the siblings of the original owner (the Browns) sold the mineral rights to SI Resources (SI), delivering it a quitclaim deed.
In November 2015, SI filed a postjudgment motion pursuant to section 2-1203 of the Code of Civil Procedure (735 ILCS 5/2-1203 (West 2014)) to vacate the section 22-40(a) order. The Castlemans moved to dismiss for lack of standing, and the circuit court granted the motion. The appellate court dismissed the appeal for lack of jurisdiction. (These rulings are not at issue.) In 2016, during the pendency of SI’s first appeal, the Groomes obtained and recorded a tax deed. SI then filed a complaint for writ of mandamus to reform the tax deed. In the mandamus action, the clerk conceded that the tax deed did not comply with the section 22-40(a) order that directed the deed be issued to the Castlemans, not the Groomes. An agreed order was entered granting the writ; and in 2017, the county clerk issued a “Corrective Tax Deed” to the Castlemans.
A few days before the 2017 deed was issued, SI filed a two-count petition. One count sought to void the tax deed issued to the Castlemans pursuant to section 22-85 of the Property Tax Code and the other count alternatively sought to vacate the section 22-40(a) order underlying that deed pursuant to section 22-45 of the Property Tax Code. The Castlemans and the Groomes moved to dismiss, and the circuit court granted the motion. On reconsideration, SI argued that the 2017 tax deed was void under section 22-85 because the certificate holder (the Groomes) did not obtain and record the tax deed within one year after expiration of the redemption period on October 10, 2015. The circuit court denied the motion for reconsideration. The appellate court affirmed.
The first issue before the court was whether SI’s count seeking to void the 2017 tax deed issued to the Castlemans pursuant to section 22-85 of the Property Tax Code alleged sufficient facts. Section 22-85 declares that the tax certificate, the tax deed, and the sale underlying them are all “absolutely void with no right to reimbursement” if “the holder of the certificate purchased” does not obtain a tax deed and record it “within one year from and after the time for redemption expires.” The court found that “the holder of the certificate” at the time the 2016 tax deed was issued was the Groomes, but the circuit court’s 2015 section 22-40(a) order directed that the deed be issued to the Castlemans. That error did not create a void deed in 2016 or effect the timeliness of its recording, which was within the one-year deadline specified in section 22-85. The court viewed the 2017 mandamus order as the equivalent of a nunc pro tunc order directing the county clerk to issue a reformed tax deed to correct the clerk’s error. The corrected 2017 deed was a continuation of the prior, erroneously drafted, deed; and, thus, was recorded timely in 2016.
On the question of SI’s options for seeking relief, the court noted that because the time for appeal of the 2015 section 22-40(a) order directing the issuance of the tax deed to the Castlemans had long passed, SI was limited to seeking relief under section 2-1203 (735 ILCS 5/2-1203 (West 2016)) or section 2-1401 (id. § 2-1401) based on one of the grounds set forth in section 22-45 of the Property Tax Code. In order to ensure the finality and marketability of the tax deed, collateral attacks on tax deeds were limited by statute to the grounds set forth in section 22-45 of the Property Tax Code. As SI could not allege the necessary facts to come within section 22-45, dismissal was warranted.
In a separate concurrence, Justice Michael Burke agreed with the majority except with respect to two minor points that did not affect the majority’s result. First, he did not agree that the mandamus court’s order was the equivalent of a nunc pro tunc order because it did not involve a scrivener’s error nor was the court asked to make the record speak for something that was actually done before. Here, the clerk intended to issue the deed to the Groomes, not the Castlemans.
Second, Justice Burke disagreed with the majority’s statement that there was no support for SI’s assertion that the 2016 deed was void. The mandamus court specifically found the 2016 deed void, but, according to Justice Burke, that finding did not matter because the complaint sought, and the court ordered, that the original tax deed be reformed.
Lastly, Justice Burke noted that the court’s opinion should not be read as expressing any position on the correctness of the mandamus action and the resulting issuance of a corrective tax deed. SI filed a mandamus complaint seeking reformation of the original deed, and the court was required to accept those facts in reaching its decision.
Municipal Trust & Savings Bank v. Moriarty, 2021 IL 126290
By Joanne R. Driscoll, Forde & O’Meara LLP
In this mortgage foreclosure case, the court construed section 2-202 of the Code of Civil Procedure (735 ILCS 5/2-202 (West 2016)) to determine whether a private process server may serve process on a defendant in Cook County without first being appointed by the circuit court. A divided panel of the Supreme Court answered this question in the negative.
The foreclosure action was filed in Kankakee County where the mortgaged commercial properties were located. The defendant was served in Cook County but did not answer or appear. A default judgment for foreclosure and sale was entered. At the hearing to confirm the sale, the defendant appeared and advised the court that he was not notified of the sale. He requested 30 days to redeem the property. The court denied his request and confirmed the sale.
The defendant filed a section 2-140l petition arguing that the court lacked personal jurisdiction to enter the default judgment because the process server had not been appointed by the court. The circuit court denied the motion, finding that section 2-202 allowed the process server to serve the defendant without limitation. A divided appellate court affirmed, holding that an appointment was not necessary because the summons was issued from a county other than Cook County.
Reading the plain language of section 2-202, the majority opinion, written by Justice Theis, reversed. Subsection (a) provides that process may be served without special appointment in counties with populations of less than 2 million. Logically, because Cook County has a population of over 2 million, a special appointment is necessary. Subsection (b) provides that summons may be served upon defendants wherever they are found in the state and by any authorized person. According to the majority, where the complaint is filed is not mentioned in either section. Here, the detective was not a “person authorized to serve process” in Cook County without a special appointment.
The majority also rejected the plaintiff’s alternative argument that the defendant voluntarily submitted to the circuit court’s jurisdiction when he appeared and participated in the hearing on plaintiff’s motion to confirm the sale. According to the court, the defendant waived any personal jurisdiction objection prospectively only; his appearance did not retroactively validate void orders entered prior to the sale confirmation hearing.
A dissenting opinion written by Justice Carter and joined by Justice Garman, opined that section 2-202(b) unambiguously “empowers ‘any person authorized to serve process’ to do so on ‘defendants wherever they may be found in the State.’” If the legislature intended to limit that language based on population of the county where the defendant is located, it would have inserted that language in section 2-202(b). Under the dissents reading of section 2-202, a duly licensed or registered private detective may serve process, “without special appointment,” anywhere in the state so long as the summons was issued from a county “with a population of less than 2,000,000.”
Roberts v. Alexandria Transportation, Inc., 2021 IL 126149
By Karen Kies DeGrand, Donohue Brown Mathewson & Smyth LLC
In one of the rare appeals reaching Illinois’s highest court under Supreme Court Rule 20, the court exercised its discretion to answer a question of law certified by the United States Court of Appeals for the Seventh Circuit, asking “whether the obligation of a settling party is uncollectable pursuant to the Illinois Joint Tortfeasor Contribution Act, 740 ILCS 100/3.” Chief Justice Anne Burke wrote for the court, which held that the obligation of a tortfeasor who settles is not “uncollectable” under section 3 of the Contribution Act.
The lawsuit arose from a tractor-trailer/automobile collision near a construction site on Interstate 70 in Madison County, and plaintiffs filed a negligence lawsuit in federal court (based on diversity jurisdiction) against the driver of the tractor-trailer and two companies. Defendants, in turn, filed a third-party complaint blaming the accident on two other companies involved in the construction project. One of the third-party defendants, Edwards-Kamalduski, LLC (“E-K”) settled with plaintiffs for $50,000. The direct defendants, collectively called “the Alex Parties” by the supreme court, also settled with the plaintiffs, for $1.85 million.
A jury trial proceeded on the Alex Parties’ contribution claim against the third-party defendant, Safety International, LLC (“Safety”), that had not settled with plaintiffs. The verdict form listed the Alex Parties, E-K and Safety; the jury allocated most of the fault, 75%, to E-K. The jury found the Alex Parties responsible for 15% of the accident liability, and allocated 10% of the liability to Safety. Based on its interpretation of the relevant provisions of the Contribution Act, the district court denied the Alex Parties’ request to reallocate E-K’s share of liability to the Alex Parties and Safety on a pro rata basis, a decision limiting the Alex Parties’ recovery to $190,000 from Safety, 10% of the total liability of $1.9 million.
Resolving the dispute between the Alex Parties and Safety required the Supreme Court to construe sections 2 and 3 of the Contribution Act. Under section 2(b), a tortfeasor need not pay more than his own share of the common liability. Section 2(d) provides that a settling tortfeasor is “discharged” from contribution liability to another tortfeasor. Under section 3, however, if “the obligation of one or more of the joint tortfeasors is uncollectable,” the remaining tortfeasors must cover the unpaid portion of the uncollectable obligation, on a pro rata basis.
The Supreme Court began its analysis by commenting that certain issues were not before the court: whether the settlements were made in good faith and whether all of the alleged tortfeasors were correctly included on the verdict form. Confining the analysis to the issues raised by the parties, the court undertook a statutory and historical overview of the Contribution Act. The Supreme Court employed a plain language analysis of the statutory term “uncollectable” and reasoned the statute presents separate topics in section 2(d), concerning “discharge,” and in referring to “uncollectable” in section 3. The court found helpful a Minnesota appellate decision that has been cited by the Illinois Appellate Court for the general proposition that the obligation of a settling tortfeasor is not uncollectable and determined that statutory references to collectability invoke the concepts of immunity or insolvency.
In the Supreme Court’s view, its holding, under which E-K’s assigned share of liability would not be reallocated, comported with the policies of the Contribution Act – to encourage settlement and equitably apportion damages among tortfeasors. The court observed that the Alex Parties established the total common liability with the knowledge that E-K’s settlement capped its payment toward the common liability and that Safety might be adjudged a small share of the total liability. The court concluded that requiring Safety to pay more than its 10% pro rata share would have been inequitable as well as contrary to the language of the statute.
Dissenting, Justice Carter, joined by Justice Michael Burke, wrote that the majority’s interpretation of section 3 contradicted section 2(d) and presented the potential to undermine the statutory goal of encouraging settlements. Justice Carter reasoned that a settling tortfeasor’s obligation for contribution to a joint tortfeasor necessarily is “uncollectable” under the language of section 2(d), which provides that a settling tortfeasor never is liable for a joint tortfeasor’s contribution claim.
Walker v. Chasteen, 2021 IL 126086
By Michael T. Reagan, Law Offices of Michael T. Reagan
In 2010, the legislature amended the Code of Civil Procedure to add a $50 filing fee for residential mortgage foreclosure cases. Related legislation created programs funded by the fee and directed where the fees would go. Funds were to be distributed to the Foreclosure Program Prevention Fund, and the Abandoned Residential Property Fund. Further direction for the money was established, such as for housing counseling agencies, foreclosure prevention services, and grants to municipalities for such things as cutting grass at abandoned properties, removing garbage and graffiti, fencing, and demolition. A general provision permitted expenditures to include repair or rehabilitation of abandoned residential property.
Two plaintiffs, who had filed mortgage foreclosure complaints and paid the fee, filed this action asserting multiple grounds for unconstitutionality of these statutes, seeking an injunction prohibiting enforcement and refund of the fees paid. The circuit of Will County certified a class of plaintiffs who had paid the fee, and established all circuit clerks in Illinois as a class of defendants.
The court granted partial summary judgment in favor of plaintiffs. The court ruled that the plaintiffs paid the fee under duress, thereby negating application of the voluntary payment doctrine. The court further found that the statutes at issue are facially unconstitutional because the challenged provisions violate the free access, equal protection, due process, and uniformity clauses of the Illinois Constitution. The consequent injunction was stayed in order to facilitate this Supreme Court Rule 302(a) direct appeal, brought by the circuit clerks of Cook and Will County, and the Attorney General, as intervenor.
Justice Carter wrote for the court, which affirmed the circuit court, with Justice Theis dissenting at length. Justice Neville did not participate. The court first took up, as it must, the non-constitutional contention that the payments were made voluntarily. Plaintiffs responded that the payments were made under duress. The court agreed.
Turning to the constitutional challenges, the court first examined the contention that the legislation violated the right to obtain justice freely, under Article I, section 12 of the Illinois Constitution of 1970, the “free access” clause. The court noted that similar provisions were contained in all prior Illinois constitutions, and that such clauses have “long been foundational principles in English and American jurisprudence,” and traced them back to the Magna Carta of 1215. Coke and Blackstone were also cited in support.
The court resolved the controversy as to whether strict scrutiny or rational basis review should be applied in favor of using the latter, as being generally applicable to claims involving court filing fees. The court found that the filing charge was a “litigation tax,” without direct relation to the expenses of the litigation or to the services rendered. The court held that the uses for the money were too remote to the reduction of foreclosure litigation. “Any relation of the filing fee to maintenance and operation of the courts is too attenuated and represents the type of social welfare program tax” that has been prohibited by precedent.
Under the free access clause, court fees must be related to services rendered by the courts or maintenance of the courts. The court concluded that there was no rational basis for imposing the fee on these litigants while excluding other classes of taxpayers from the burden.
Justice Theis’ dissent stated that the majority in effect applied a heightened scrutiny rather than the proper rational basis standard, and failed to analyze the nature and history of the litigation under that test. She documented the legislative history and the nature of the foreclosure crisis in depth. Justice Theis concluded that the majority engaged in an “untenable and unprecedented departure from our traditional notions of rational basis review.”