The Trusted Adviser March 2011 | Volume 4 • Number 2



Tax Deeds

SI Securities v Powless, 403 Ill App 3d 426, 934 NE2d 1, 343 Ill Dec 1 (5th D, 2010).

Facts:The property in question lies Williamson County, Illinois. It was once identified as "Lot Four in Kent's Second Addition to the City of Marion, Illinois." (Lot Four) Following a new plat of subdivision recorded in 1995, what was once Lot Four became "Lot One and part of Lot Two in Kent's Third Addition to the City of Marion" (Lot One and Lot Two).

In 1996, for reasons unclear in the record, the old Lot Four was assessed for property taxes, which were never paid. At the time, the properties were managed by a trust. The trustee did not pay or challenge the 1996 real estate taxes.

In 1999, the trustee transferred the property to Marion and Roberta Castellano, who then sold it on to American Traditional Homes, Inc., which was solely owned and operated by Phillip Castellano. (Castellano). This interest was unrecorded. Castellano built and maintained a residence on Lot 2.

In the meantime, S.I. Securities purchased the outstanding taxes for Lot Four in 1997. In 2000, S.I. Securities filed a petition for a tax deed alleging the 1996 taxes were never paid. S.I. Securities gave notice for this proceeding to the initial trustee, as well as to Marion and Roberta Castellano. S.I. Securities also published a notice of the pending proceeding in the local newspaper, using the Lot Four description. Despite the fact that Castellano lived on the premises, S.I. Securities reported to the court by affidavit that it had visited the property and did not find any residents. Ultimately, no one appeared to contest the proceedings and the court issued the tax deed.

In 2003, Castellano filed a petition for relief from judgment under 735 ILCS 2-1401. The trial court concluded that Castellano's motion was past the two year statute of limitations, but allowed the tolling of the statute due to Castellano's claims that S.I. Securities had fraudulently delayed its petition. S.I. Securities appealed.

Holding:Reversed. The appellate court reminded that the tolling of the statute of limitations is a drastic measure only to be applied with the most stringent of standards, which the court found were not met by the record in this case. Therefore, the standard two-year statute of limitations protected the tax deed from Castellano's action.

Castellano further argued that the judgment issuing the tax deed was void on its face because the court lacked jurisdiction to issue the order. He argued that, because the taxes were on an outdated description and because S.I. Securities had published notice on that description, the court did not have personal jurisdiction over him. The appellate court dismissed this argument however, declaring that a tax deed proceeding is in rem, with jurisdiction attaching to the land and not the owner. Because the land's description, while outdated, was correct and could be readily identified, the trial court had jurisdiction over the land itself and could properly issue a tax deed.

Ultimately, the appellate court concluded that Castellano failed to offer adequate evidence to toll the two-year statute of limitations, and therefore reversed the trial court's decision. It further found no jurisdictional reason for which the tax deed would be void and therefore reinstated the order that had issued the tax deed.






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[Last update: 3-4-11]