In re Application of the County Treasurer and ex officio County Collector of Kane County

2020 IL App (2d) 190856-U

• Court: Appellate Court of Illinois
• Decided: September 4, 2020
• Docket: 2-19-0856
• Status: Unpublished

Opinion

2020 IL App (2d) 190856-U No. 2-19-0856 Order filed September 4, 2020

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

In re APPLICATION OF THE COUNTY ) Appeal from the Circuit Court of TREASURER AND ex officio COUNTY ) of Kane County. COLLECTOR OF KANE COUNTY ) for General Taxes for the Year 2014 ) ) No. 18-TX-59 ) (Chicago Trust Company, UTA SBL-4158, ) Petitioner-Appellant and Cross-Appellee, ) Honorable v. Heaven Nanuz, Respondent-Appellee ) Thomas C. Hull III, and Cross-Appellant). ) Judge, Presiding. ______________________________________________________________________________

JUSTICE JORGENSEN delivered the judgment of the court. Justices Hutchinson and Hudson concurred in the judgment.

ORDER

¶1 Held: Petitioner, which purchased property at a tax sale, did not make a diligent inquiry to locate respondent, the owner, to serve her with notice of intent to apply for a tax deed. Once petitioner learned that respondent was not living at the property, petitioner should have searched for respondent’s name in civil and criminal records in the database maintained by the same clerk’s office in which petitioner filed its petition for a tax deed.

¶2 Petitioner, Chicago Trust Company, UTA SBL-4158, appeals the trial court’s order finding

that it failed to make a diligent inquiry under section 22-15 of the Property Tax Code (Code) (35

ILCS 200/22-15 (West 2018)) to notify respondent, Heaven Nanuz, of its petition for a tax deed. 2020 IL App (2d) 190856-U

Petitioner argues that the trial court erred in finding that it was required to search criminal records

to locate respondent. We affirm.

¶3 I. BACKGROUND

¶4 In May 2018, petitioner’s predecessor in interest, Faik Properties, LLC, filed a take notice

and petition for a tax deed after purchasing property owned by respondent at a tax sale. Faik

Properties attempted service at the address of the property, but the sheriff’s deputy reported being

told on July 13, 2018, that respondent “no longer lives here per Ex-husband.” The affidavit of

service further stated that respondent “was not served/found in Kane County, Illinois.” On that

same date, a copy was left at the property with John Nanuz, who was listed as a “family member.”

¶5 Respondent objected on several grounds to the issuance of a tax deed. She argued that she

was never served with the take notice and that petitioner did not make a diligent inquiry to locate

her. She also objected that petitioner did not notify certain interested parties, i.e., Bydsom, Inc., a

subsequent tax buyer; the State of Illinois, a tax lienholder; and Cambridge Lakes, a judgment

creditor. Finally, she claimed that the take notice was insufficient because it failed to include

postage fees in the total amount required for redemption. In January 2019, Faik Properties

assigned its interest to petitioner.

¶6 At the hearing on the objections, respondent testified that she was not residing at the

property in July 2018 but had been removed from the house because of a criminal matter and was

residing with her sister. Her father, John Nanuz, and her fiancé remained in the house. She was

not allowed to speak with her fiancé and was not on speaking terms with her father. She testified

that her attorney at the time knew how to contact her. She was unaware that the taxes were not

being paid, because she believed that her parents were paying them. She was never served with

the take notice and petition and only learned of them when she attempted to sell the house.

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¶7 John Nanuz testified that a Kane County sheriff’s deputy gave him documents but that he

did not give them to anyone. Respondent’s fiancé testified that he told the deputy that respondent

did not live there anymore. The record indicates that Faik Properties did only a title search to

attempt to locate respondent.

¶8 In a written order, the trial court found that petitioner failed to make a diligent inquiry to

notify respondent of the petition for a tax deed. The court noted that a petitioner for a tax deed

must make a diligent inquiry using public records and an Internet search. The court then listed

some of the public information that was available through a “simple search” of respondent’s name

in the database maintained by the Kane County Clerk’s Office. The search showed, for instance,

that before the petition was filed, respondent had been arrested, charged with domestic battery,

and ordered to stay away from the property. Respondent appeared in court multiple times before

and after the petition was filed. The available information also included the addresses not only of

respondent’s attorney but also respondent’s sister, who had posted bond for her. The court

recognized that it might be unreasonable in some circumstances to expect a tax deed petitioner to

search criminal records to locate a homeowner. However, in this case the expectation was

reasonable because the homeowner’s criminal records were maintained by the same clerk’s office

where the petition for a tax deed was filed. A search of respondent’s name in the clerk’s database

would have yielded sufficient information to locate respondent. The court concluded that a diligent

inquiry would have included the database search.

¶9 The court declined to rule on respondent’s remaining objections to the issuance of a tax

deed. Petitioner appeals and respondent cross-appeals.

¶ 10 II. ANALYSIS

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¶ 11 Petitioner contends that the trial court erred as a matter of law by requiring it to search

criminal records. Petitioner also argues that substitute service on John Nanuz was sufficient.

¶ 12 “The Code sets forth various notice requirements for obtaining a tax deed.” In re

Application of County Collector for Judgment & Order of Sale Against Lands & Lots Returned

Delinquent for Nonpayment of General Taxes for Year 2009, 2015 IL App (4th) 140810, ¶ 25

(hereinafter Gupta). Under section 22-5 of the Code, after a tax sale, the purchaser must deliver

to the county clerk a take notice advising the recipient that the specified property has been sold for

delinquent taxes and that a petition for issuance of a tax deed transferring title and right to

possession of the property will be filed if redemption is not made. Id.; 35 ILCS 200/22-5 (West

2018). The notice must include the amount required to redeem the property and the expiration

date of the redemption period. Id.; 35 ILCS 200/22-5 (West 2018).

¶ 13 The primary purpose of the tax-deed system is to coerce tax-delinquent property owners to

pay their taxes, not to assist others in depriving the owners of their property. In re Application of

Skidmore, 2018 IL App (2d) 170369, ¶ 14. To be entitled to a tax deed, section 22-10 of the Code

requires the purchaser to send the take notice to the “owners, occupants, and parties interested in

the property, including any mortgagee of record.” 35 ILCS 200/22-10 (West 2018). The Code

further provides that the purchaser “shall give the notice required by Section 22-10 by causing it

to be published in a newspaper as set forth in Section 22-20. In addition, the notice shall be served

by a sheriff *** upon owners who reside on any part of the property sold by leaving a copy of the

notice with those owners personally.” Id. § 22-15. The same form of notice must also be served

“upon all other owners and parties interested in the property, if upon diligent inquiry they can be

found in the county, and upon the occupants of the property.” Id.

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“If any owner or party interested, upon diligent inquiry and effort, cannot be found or

served with notice in the county *** and the person in actual occupancy and possession is

tenant to, or in possession under the owners or the parties interested in the property, then

service of notice upon the tenant, occupant or person in possession shall be deemed service

upon the owners or parties interested.” Id.

In addition, within specified time frames before the expiration of the redemption period for

property sold, the purchaser may file a petition asking the court to direct the county clerk to issue

a tax deed if the property is not redeemed. Id. § 22-30. Notice of the filing of the petition “shall

be given to occupants, owners[,] and persons interested in the property.” Id. § 22-30.

¶ 14 A tax purchaser must strictly comply with the notice requirements, and those provisions

are rigidly enforced. Gupta, 2015 IL App (4th) 140810, ¶ 28. The tax deed petitioner carries the

burden of demonstrating that it complied with the Code and provided the required notice. Id.

“ ‘Whether the purchaser’s actions are sufficient to comprise due diligence in determining the

identities of, and providing notice to, those who hold an interest in the property is a question of

fact.’ ” Id. ¶ 30 (quoting Banco Popular v. Beneficial Systems, Inc., 335 Ill. App. 3d 196, 213

(2002)). “The trial court’s determination as to diligence ‘will not be reversed on appeal unless it

is against the manifest weight of the evidence.’ ” Id. (quoting Gacki v. La Salle National Bank,

282 Ill. App. 3d 961, 964 (1996)).

¶ 15 A “diligent inquiry” is an inquiry “ ‘as full as the circumstances of the situation will

permit.’ ” Id. ¶ 29 (quoting In re Application of the Douglas County Treasurer & ex officio County

Collector, 2014 IL App (4th) 130261 ¶ 34 (hereinafter Ballinger) It “ ‘is that inquiry which a

diligent person who is intent on discovering a fact would reasonably make.’ ” Id. ¶ 29 (quoting

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In re Application of the County Treasurer & ex officio County Collector, 2011 IL App (1st)

101966, ¶ 44).

¶ 16 The Fourth District has held that a tax purchaser fails to perform a diligent inquiry if he or

she does not make reasonable efforts to notify all persons whose interest may reasonably be

inferred from the public records regarding the property’s ownership. Ballinger, 2014 IL App (4th)

130261, ¶ 42. “While ‘an exhaustive list’ covering every possible scenario might be desirable, the

[Code] gives tax purchasers the ability to determine what is required in a given situation. Some

cases may only require a quick investigation while others may require more effort and shoe

leather.” Id. ¶ 45. “A tax purchaser need not conduct an open-ended search (citation), but all cases

require a tax purchaser to pursue all lines of inquiry open to him. These lines of inquiry include

sources such as probate records, public directories, voter registration records, and visiting the

property.” Id. “In our contemporary, technologically connected society, a diligent individual

would undoubtedly utilize the Internet—with its enormous reach and nearly instant results—to

locate property owners and addresses.” Id.

¶ 17 Petitioner, in arguing that it performed a diligent inquiry to locate respondent, focuses on

its efforts to ascertain the property owner. Petitioner notes that its title search showed respondent

as the owner living at the property address as of the date that the petition was filed. Petitioner

argues that, because a search of criminal records would not have ascertained the owners,

occupants, and parties interested in a property, the trial court erred as a matter of law by requiring

that petitioner search such records. But the Code required more than simply ascertaining that

respondent was an owner and interested party. It also required service of notice on her and did not

allow for notice by publication or service on a substitute party unless she could not be found by

diligent inquiry and effort. Further, the court did not hold that a tax purchaser must search the

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criminal records as a matter of law. Instead, it addressed the factual issue of whether petitioner’s

failure to do so under the circumstances demonstrated the lack of a diligent inquiry.

¶ 18 Petitioner erroneously relies on In re Application of County Collector for Judgment Order

of Sale Against Lands & Lots Forfeited for Nonpayment of General Taxes & Special Assessments

for the Year 1985 and Prior Years, 220 Ill. App. 933, 939 (1991), where the court held that a tax

purchaser, having once fulfilled its search and obligations, need not update its search to discover

persons with interests in the property that were subsequently recorded. Petitioner does not claim

that it failed to discover respondent’s identity when it conducted its initial search for persons with

interests in the property. The issue, rather, is petitioner’s search for respondent’s whereabouts.

¶ 19 In that regard, petitioner did not present evidence of any attempt to locate respondent other

than through conducting a title search. The law is clear that a tax deed petitioner must do more

than simply ascertain the owner’s identity. Moreover, the record is clear that the sheriff was told

that respondent no longer lived at the property. Nothing shows that petitioner utilized the Internet,

public directories, or other sources to attempt to locate respondent. The trial court, after hearing

evidence, noted that it might be unreasonable in some cases to expect a petitioner to search criminal

records to locate a property owner, yet in this particular case, where the criminal records were

maintained by the same clerk’s office where the petition for a tax deed was filed, “a diligent inquiry

would require the Petitioner to run the Homeowners name in the Circuit Clerk’s database.” The

court further found that, had a diligent inquiry been made, a great deal of information would have

been found by which to locate respondent. The court’s determination was not against the manifest

weight of the evidence.

¶ 20 Petitioner also argues that the court erred because the record shows that substitute service

was perfected when the notice was left with John Nanuz. But the Code does not allow substitute

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service unless the property owner cannot be found after a diligent inquiry. 35 ILCS 200/22-10

(West 2018). As previously discussed, the trial court did not err in finding a lack of a diligent

inquiry.

¶ 21 Respondent filed a cross-appeal challenging the trial court’s denial of her remaining

objections. Because the trial court granted her relief on the issue of service of notice, it declined

to address the remaining objections. Likewise, because we affirm on the basis of lack of service,

we need not, and do not, address the remaining objections, as they are moot.

¶ 22 III. CONCLUSION

¶ 23 For the reasons stated, the judgment of the circuit court of Kane County is affirmed.

¶ 24 Affirmed.

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