EAST ST. LOUIS - St. Clair County Treasurer Andrew Lopinot asserts immunity against a claim that the county commits theft when it issues deeds to investors who pay delinquent taxes.
County counsel Thomas Ysursa moved to dismiss the class action claim on Aug. 8, stating Lopinot has strictly followed the state’s property tax code.
He claimed U.S. Seventh Circuit appellate judges held that when county officials execute directives of a state court they act as an arm of the state and are immune from suit.
“Plaintiffs’ quarrel is with the state,” he wrote.
Ysursa denied the theft allegation, claiming plaintiffs didn’t allege that St. Clair County retained any surplus beyond the taxes owed and the associated fines and penalties.
He claimed Second District appellate judges held that the result of the proceeding strikes many as harsh because a tax buyer can gain title to real estate for a fraction of its value.
He claimed the judges held that, “However, this process has been upheld in light of the state's compelling interest in collecting taxes.”
Attorney Daniel Suhr of Chicago filed the complaint in April for Top Metal Buyers of East St. Louis, five St. Clair County residents and two Sangamon County residents.
Suhr named Lopinot and Sangamon County treasurer Joe Aiello as defendants and identified Lopinot as president of the state association of county treasurers.
“Plaintiffs and all others similarly situated were victims of institutionalized theft by their county government thanks to Illinois’s property tax statutes,” he wrote.
“In many instances the county government retains the tax lien and directly forecloses, retaining the surplus value for itself.”
He claimed the county sometimes executes a tax deed, sells a property, and keeps the profits.
He claimed at other times the county retains title to a property.
He claimed the county retains surplus value either way.
He claimed victims were most often poor, elderly and vulnerable.
“The fair market value of each property can fairly be determined from commercially available data,” he wrote.
He claimed values could be calculated in a simple and straightforward way applicable to the entire class.
Ysursa expressed doubt, claiming any measure of damages would require calculating the difference between market value and delinquent taxes plus interest and penalties.
He claimed individual valuations would negate certification of a class action.
He claimed the counties followed the property tax code that the General Assembly enacted and amended over the years.
“Plaintiffs do not allege that defendants enacted an ordinance or established a procedure independent of the property tax code which caused a taking,” he wrote.
“Once property taxes become delinquent the property tax code provides that the treasurer may apply in circuit court for judgment and order of sale.”
He wrote that the sale occurs on an annual basis and an owner can pay delinquent taxes and costs any time prior to the sale.
He wrote that if judgment is entered the treasurer shall offer the delinquent taxes “for sale.”
He wrote that the term “sale” in the statute means delinquent taxes for each parcel are sold at auction to a tax purchaser willing to pay the taxes at the lowest interest rate.
Legislators lowered the maximum rate from 18% to 9% in 2022.
Ysursa wrote that when a winning bidder has paid all taxes, interest, and costs, the county's lien is extinguished and the county clerk must issue a tax sale certificate.
He wrote that the certificate does not affect the property owner's title.
He described a series of necessary notices and wrote that if a certificate holder fails to comply no deed is issued and the owner will not lose title.
He wrote that if there are procedural irregularities or merchantability issues, the county or the certificate holder may file for “sale in error” and undo a sale of taxes.
He wrote that within five months but not less than three months prior to expiration of the redemption period, a tax purchaser may file a petition in circuit court seeking an order directing the county clerk to issue a tax deed to the property.
“Finally, the state circuit court issues an order directing the county clerk to issue to the purchaser or its assignee a tax deed," he wrote.
He wrote that if no one bids on a parcel, forfeiture is declared and a certificate is issued to the county as trustee of taxing districts within the parcel.
“Under the code, property which goes unsold at a tax sale for want of bidders shall be forfeited to the state,” he wrote.
“Title does not change hands, however, and the state does not acquire an interest in the property.”
"Forfeiture means simply that other collection methods will be employed to collect the delinquent taxes.”
He wrote that certificates held by the county may be purchased from a county trustee.
“Property tax code provides that tax deeds are incontestable except by an appeal from the order of the court that directed the county clerk to issue the tax deed," he wrote.
He claimed legislators intended to provide a title free and clear from previous titles and claims and assurance that rights to the property would be unimpaired.
He claimed an owner has recourse to recover equity even after failing to pay taxes, arrange a sale or set the tax deed aside.
He claimed an owner who has lost title to a tax deed is eligible to seek the surplus value of property by making a claim under each county’s indemnity fund.
He claimed counties charge fees for the fund to winning bidders at the annual sale.
“The indemnity fund provides relief to real estate property owners even though the tax sale took place because of the real estate owner's fault or negligence," he wrote.
He wrote that it provides the exclusive remedy for the relief the plaintiffs request.
Suhr’s complaint mentioned the indemnity fund but called it structurally underfunded.
He claimed relief is available only for properties up to four residential units, leaving Top Metal Buyers ineligible.
He claimed maximum relief is $99,000 and plaintiff Don Gilliam lost more than $100,000.
Plaintiffs in St. Clair County (Name - Residence - Claim of Loss):
Top Metal Buyers - East St. Louis - More than $50,000
Shelly Branson - Cahokia Heights - More than $60,000
Debra Mosby - Swansea - Almost $30,000
Don Gilliam - East Carondelet - More than $100,000
Shirley Ferrell - East St. Louis - More than $75,000
Trenise Hill - Cahokia Heights - Almost $50,000