ILLINOIS OFFICIAL REPORTS
Appellate Court
Demos v. Pappas, 2011 IL App (1st) 100829
Appellate Court HARRY DEMOS, GUS DEMOS and JAMES DEMOS, Petitioners-
Caption Appellees, v. MARIA PAPPAS, County Treasurer of Cook County,
Illinois, as Trustee of the Indemnity Fund Created by Section 21-295 of
the Property Tax Code (35 ILCS 200/21-295), Respondent-Appellant
(Bank of America, Illinois, Citation Respondent-Appellee).
District & No. First District, First Division
Docket No. 1-10-0829
Filed August 15, 2011
Held An order imposing postjudgment interest of 9% pursuant to section 2-
(Note: This syllabus 1303 of the Code of Civil Procedure on petitioners’ judgment against the
constitutes no part of indemnity fund established by section 21-295 of the Property Tax Code
the opinion of the court was reversed on the ground that the 6% interest provision of section 2-
but has been prepared 1303 applied to the judgment.
by the Reporter of
Decisions for the
convenience of the
reader.)
Decision Under Appeal from the Circuit Court of Cook County, No. 08-COIN-11; the
Review Hon. Edward P. O’Brien, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Anita M. Alvarez, State’s Attorney, of Chicago (Marilyn Fusco
Appeal Schlesinger and Tatia Gibbons, Assistant State’s Attorneys, of counsel),
for appellant.
Jeffrey Blumenthal, of Chicago, for appellees.
Panel JUSTICE ROCHFORD delivered the judgment of the court, with
opinion.
Presiding Justice Hall and Justice Lampkin concurred in the judgment
and opinion.
OPINION
¶1 Respondent, Maria Pappas, county treasurer of Cook County, Illinois (Treasurer), as
trustee of the indemnity fund created by section 21-295 of the Property Tax Code (35 ILCS
200/21-295 (West 2008)), appeals from an order imposing 9% interest on an indemnity-fund
judgment, pursuant to the postjudgment interest provision of the Code of Civil Procedure
(hereinafter the Interest Act) (735 ILCS 5/2-1303 (West 2008)). The Treasurer argues that
the 6% interest provision of the Interest Act should apply to such a judgment. We agree and
therefore reverse the order of the circuit court.
¶2 I. Background
¶3 Petitioners, Harry Demos, Gus Demos and James Demos, filed a “Petition for Indemnity
Fund Relief” against the Treasurer on May 15, 2008, seeking compensation for the loss of
their property, which had been transferred from their ownership by tax deed. Petitioners
alleged their property had been sold for the nonpayment of 1999 real estate taxes. After the
period of redemption, a tax deed was issued by an order of the circuit court in 2004.
Petitioners claimed they paid the 1999 taxes on the property by mail, did not receive notice
of the tax sale proceedings, and did not learn of the tax sale until after the tax deed had been
recorded in 2004. Petitioners failed to vacate the tax deed, and they further alleged that they
were not negligent or at fault for the loss of their property by tax sale and were entitled to
relief from the indemnity fund.
¶4 On September 19, 2009, an agreed judgment in the amount of $497,500 was entered in
favor of petitioners and against the Treasurer, “solely in her capacity as Trustee of the
Indemnity Fund.” The Treasurer, therefore, issued petitioners a check dated November 4,
2009. That check was in the amount of $501,425.48, including $3,925.48 of interest, paid
at a rate of 6% per annum from September 16, 2009 to November 4, 2009.
¶5 On November 18, 2009, petitioners served Bank of America with a “Citation to Discover
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Assets to a Third Party,” asserting they were owed additional interest on their judgment, and
they requested Bank of America to preserve funds held on behalf of the Treasurer. The
Treasurer appeared on the citation and made an objection.
¶6 The issue before the trial court in the citation proceeding was whether the original
judgment, which was entered in favor of the petitioners and against the Treasurer as trustee
of the indemnity fund, was subject to a postjudgment interest rate of 6% or 9% under the
Interest Act. That statutory provision provides, in relevant part:
“Judgments recovered in any court shall draw interest at the rate of 9% per annum
from the date of the judgment until satisfied or 6% per annum when the judgment
debtor is a unit of local government, as defined in Section 1 of Article VII of the
Constitution, a school district, a community college district, or any other
governmental entity.” 735 ILCS 5/2-1303 (West 2008).
¶7 The Treasurer and petitioners filed cross-motions for summary judgment as to the issue
of whether additional interest was owed. The Treasurer argued that petitioners were entitled
to 6% postjudgment interest because the Treasurer was a “governmental entity.” Petitioners,
on the other hand, argued they were entitled to 9% interest because the Treasurer, as a trustee
of the indemnity fund, does not perform a governmental function and the indemnity fund is,
therefore, “private” because it is made up of fees paid by tax deed purchasers and distributed
to a “finite group of people who have lost their property through a tax sale.” The trial court
granted petitioners’ motion, found that petitioners were entitled to 9% interest, and ordered
Bank of America to tender the additional interest owed to petitioners. The Treasurer timely
appealed.
¶8 II. Analysis
¶9 On appeal, the Treasurer reasserts the arguments made in the trial court with respect to
the proper amount of interest it owed to petitioners. Petitioners have not filed an appellees’
brief in this court, and we previously ordered that this appeal would be decided on the
Treasurer’s brief only. See First Capitol Mortgage Corp. v. Talandis Construction Corp.,
63 Ill. 2d 128, 133 (1976) (where the record in the case is neither lengthy nor complicated
and the issue is one of law, an appeal may be decided properly without the aid of an
appellee’s brief).
¶ 10 A. Standard of Review
¶ 11 Summary judgment is appropriate where there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West
2008). By filing cross-motions for summary judgment, the parties “agree that only a question
of law is involved and invite the court to decide the issues based on the record.” Millennium
Park Joint Venture, LLC v. Houlihan, 241 Ill. 2d 281, 309 (2010). An order granting a
motion for summary judgment is subject to a de novo standard of review. Id.
¶ 12 In construing statutes, our primary objective is to ascertain and give effect to the
legislature’s intent. Phoenix Bond & Indemnity Co. v. Pappas, 194 Ill. 2d 99, 106 (2000).
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“The most reliable indicator of the legislature’s intent is the language of the statute, given
its plain, ordinary, and popularly understood meaning.” Gardner v. Mullins, 234 Ill. 2d 503,
511 (2009). “[W]here an enactment is clear and unambiguous a court is not at liberty to
depart from the plain language and meaning of the statute by reading into it exceptions,
limitations or conditions that the legislature did not express.” Kraft, Inc. v. Edgar, 138 Ill.
2d 178, 189 (1990). “[W]here the language used leaves uncertainty as to how it should be
interpreted in a particular context, the court can consider the purpose behind the law and the
evils the law was designed to remedy.” Phoenix Bond, 194 Ill. 2d at 106. Furthermore, the
proper construction of statutes presents a question of law, which we also review de novo. See
Acme Markets, Inc. v. Callanan, 236 Ill. 2d 29, 35 (2009).
¶ 13 B. Statutory Framework
¶ 14 The determination of the issue on appeal first requires a review of property tax law and,
in particular, certain statutory provisions relating to procedures for the enforcement of
property taxes which are found in the Property Tax Code. 35 ILCS 200/21-5 et seq. (West
2008).
¶ 15 1. Property Tax Code
¶ 16 “[P]roperty taxes are a principal source of revenue for local governments.” First National
Bank & Trust Co. of Evanston v. Rosewell, 93 Ill. 2d 388, 394 (1982). Under article IX,
section 6, of the Constitution, property taxes are to be levied on all property, except for
certain exempted property. Ill. Const. 1970, art. IX, § 6. Thus, the Constitution “guarantees
every real property owner in this State that the burdens of real property taxation will be
evenly distributed among all owners of such property.” McKenzie v. Johnson, 98 Ill. 2d 87,
93 (1983). A lien attaches to property in the amount of taxes, interests and costs that is
superior to all other liens and exists until the taxes are paid or until the property is sold under
the Property Tax Code. The county collector may offer property for public sale when a
judgment has been rendered against the property for the nonpayment of real estate taxes. 35
ILCS 200/21-190 (West 2008). The buyer of property at such a sale does not receive title to
the property but, instead, receives a “certificate of purchase.” 35 ILCS 200/21-250 (West
2008). The issuance of a certificate of purchase “does not affect the delinquent property
owner’s legal or equitable title to the property.” Phoenix Bond, 194 Ill. 2d at 101. The
property owner has the right to redeem the property, upon the payment of the tax arrearage
and costs, until such time as the redemption period expires. 35 ILCS 200/21-345 to 21-355
(West 2008). If the property is not redeemed, the tax purchaser may file a petition in the
circuit court asking the court to enter an order directing the county clerk to issue a tax deed
to the property. 35 ILCS 200/22-30 (West 2008).
¶ 17 The overall purpose and goal of the enforcement provisions of the Property Tax Code is
to place “property in the hands of those who are both willing and able to pay their taxes.”
Garcia v. Rosewell, 43 Ill. App. 3d 512, 516 (1976). The procedures relating to “certificates
of purchase and for issuance of tax deeds are legislative means to encourage buyers at tax
sales, increase collection of tax revenue by taxing authorities and free land to once again
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enter the stream of commerce and bear its aliquot share of the tax burden.” Id. (quoting City
of Chicago v. City Realty Exchange, Inc., 127 Ill. App. 2d 185, 189 (1970)). See also In re
Application of the County Collector, 217 Ill. 2d 1, 17-18 (2005) (“If tax purchasers do not
participate in tax sales, then delinquent taxpayers lose the incentive to pay their real estate
taxes and tax revenues fall.”).
¶ 18 2. Indemnity Fund
¶ 19 A tax deed order is subject to direct and collateral attack. 35 ILCS 200/22-45 (West
2008). However, where the tax deed cannot be set aside, the interest in enforcing tax
assessments through the forfeiture process does, in some instances, create harsh results
causing some persons to lose their property through no fault of their own. See Malmoff v.
Kerr, 227 Ill. 2d 118, 123 (2007); Hedrick v. Bathon, 319 Ill. App. 3d 599, 604 (2001). For
this reason, the legislature created the indemnity fund “to indemnify eligible parties for losses
sustained from failure to redeem their property.” In re Application of the County Treasurer
of Cook County, Illinois, for Judgement & Sale of Real Estate for General Taxes for the Year
1980, 185 Ill. App. 3d 701, 704 (1989).
¶ 20 The indemnity fund consists of fees and other payments collected by the county collector
from those persons who purchase property at tax sales. 35 ILCS 200/21-295(a), (a-5) (West
2008). The county collector transfers these payments to the treasurer of the county where the
sold property is located. 35 ILCS 200/21-295(b) (West 2008). The county treasurer “holds
and administers the fund, acting solely as trustee of the fund.” Carswell v. Rosewell, 150 Ill.
App. 3d 168, 170 (1986). The indemnity fund is “held to satisfy judgments obtained against
the County Treasurer, as trustee of the fund.” 35 ILCS 200/2-295(b) (West 2008). The county
board is charged with determining the amount of money to be maintained in the indemnity
fund in that county. 35 ILCS 200/21-300(a) (West 2008). “Any moneys accumulated by the
County Treasurer in excess of the amount so established, as trustee of the fund, shall be paid
by him or her annually to the general fund of the County.” Id. Counties that have a Tort
Liability Fund and provide by ordinance that indemnity fund judgments will be paid out of
the Tort Liability Fund may deposit the monies collected for indemnity fund purposes in the
general funds of that county. 35 ILCS 200/21-300(b) (West 2008).
¶ 21 Persons whose property has been sold for taxes and who cannot set aside the tax deed
may seek to recover the fair cash value of their property on the day a tax deed issues, less any
mortgage or liens. 35 ILCS 200/21-305 (West 2008). A party seeking indemnity must file
a petition with the court and “shall name the County Treasurer, as Trustee of the indemnity
fund, as defendant to the petition, and shall ask that judgment be entered against the County
Treasurer, as Trustee, in the amount of the indemnity sought.” 35 ILCS 200/21-305(b)(1)
(West 2008). “No payment shall be made from the fund, except upon a judgment of the court
***.” 35 ILCS 200/21-295(b) (West 2008). The county treasurer satisfies indemnity fund
judgments in chronological order and only when there are sufficient funds to pay the
judgment in full. Carswell, 150 Ill. App. 3d at 170.
¶ 22 Section 21-305 provides that the Civil Practice Act applies to indemnity fund
proceedings. 35 ILCS 200/21-305(b)(1) (West 2008). Therefore, in Carswell, this court held
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that the Interest Act applies to judgments entered pursuant to the indemnity fund statute.
Carswell, 150 Ill. App. 3d at 172. Carswell did not address or determine the issue of the
appropriate rate of postjudgment interest under the Interest Act.
¶ 23 C. The Nature of the Treasurer’s Office
¶ 24 Under the terms of the Interest Act, the 6% rate applies where the “judgment debtor” is
a “governmental entity.” 735 ILCS 5/2-1303 (West 2008). The judgment debtor, in this case,
is Maria Pappas, county treasurer of Cook County, Illinois, as trustee of the indemnity fund,
created by section 21-295 of the Property Tax Code. We must, therefore, decide if this
judgment debtor is a governmental entity.
¶ 25 The Interest Act does not include a definition of a governmental entity. We recently
defined the term in Barry v. Retirement Board of the Fireman’s Annuity & Benefit Fund, 357
Ill. App. 3d 749, 779 (2005). “[I]n order to qualify as a governmental entity [under the
Interest Act], an entity must perform a governmental function.” Id. A governmental function
is “ ‘[a] government agency’s conduct that is expressly or impliedly mandated or authorized
by constitution, statute, or other law and that is carried out for the benefit of the general
public.’ ” (Emphasis in original.) Id. (quoting Black’s Law Dictionary 704 (7th ed. 1999)).
Thus, the more specific question to be determined is whether the Treasurer, as trustee of the
indemnity fund, carries out duties authorized by the constitution, statute, or other law for the
benefit of the general public.
¶ 26 Initially, we will examine the functions and duties of a county treasurer. The Illinois
Constitution provides that a county shall elect a treasurer who, as a county officer, “shall
have those duties, powers and functions provided by law and those provided by county
ordinance.” Ill. Const. 1970, art. VII, § 4(c), (d). Division 3-11 of the Counties Code sets
forth the duties, powers and functions of a county treasurer in counties with a population
over 150,000. 55 ILCS 5/3-11001 et seq. (West 2008). This act provides that a county
treasurer “shall receive and safely keep the revenues and other public moneys of the county,
and all money and funds authorized by law to be paid to him, and disburse the same pursuant
to law.” 55 ILCS 5/3-10005 (West 2008). The Counties Code applies to a county treasurer
“when acting as such or in any other official capacity incident to his incumbency of the office
of county treasurer.” 55 ILCS 5/3-11001 (West 2008). The Counties Code sets forth
depositing and record keeping requirements for all “county moneys,” which is defined to
include “all moneys to whomsoever belonging, received by or in possession or control of the
incumbent of the office of county treasurer when acting as such or in any other official
capacity incident to his incumbency of the office of county treasurer.” Id.
¶ 27 The county treasurer is prohibited from retaining fees, commissions or compensation,
except for the salary and compensation set by law for any services acting as county treasurer,
or “any other official capacity incident to his incumbency of that office.” 55 ILCS 5/3-11017
(West 2008). Nor can the county treasurer personally profit from any county moneys. 55
ILCS 5/3-11019 (West 2008). The expenses incurred by a county treasurer in the defense of
suits brought “against him in any official capacity shall be paid out of the county treasury.”
55 ILCS 5/3-11016 (West 2008).
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¶ 28 Generally, the Treasurer must obtain an order from the county board to make payments
from the county treasury. 55 ILCS 5/3-10014 (West 2008). Payments may be made by
voucher from certain funds, including “[t]rust funds for such purposes as may be provided
for by law.” 55 ILCS 5/3-10005.3(d) (West 2008). Thus, monies in trust funds may be
disbursed without waiting for a county board meeting and county board order, but the use of
the vouchers allows oversight and control of the disbursement. See generally 1973 Ill. Att’y
Gen. Op. 22.
¶ 29 Under the Constitution, the Treasurer is to perform all duties mandated by state law. See
Harlan v. Sweet, 139 Ill. 2d 390, 398 (1990) (“[A] function of the office of [T]reasurer is to
perform the duties imposed upon that office by the legislature.”). Our examination of the
Counties Code reveals the public nature of the office and duties of the Treasurer. The
Treasurer, in whatever capacity, is charged by the Counties Code to receive, maintain and
safeguard all funds entrusted to her by state law, including special funds such as the
indemnity fund, “to whomsoever belonging.” 55 ILCS 5/3-11001 (West 2008). Although a
county treasurer performs “some functions similar to trustees,” a county treasurer remains
a public official when performing functions incident to the office. See S.A.S. Co. v.
Kucharski, 53 Ill. 2d 139, 143 (1972).
¶ 30 It is equally clear that the Treasurer, as trustee of the indemnity fund, is performing
functions authorized by law and for the public. The legislature has imposed upon the
Treasurer the duty to act and function as trustee of the indemnity fund. As discussed, the
indemnity fund is part of the overall scheme in the enforcement and collection of property
tax revenues and serves a significant public purpose. The Treasurer, as trustee of the
indemnity fund, as with all monies received by her, must maintain the integrity of those funds
and disburse those funds in accord with the applicable statutory provisions. Because acting
as a trustee is considered incidental to her office, the Treasurer is prohibited from gaining
personal profit from or receiving additional compensation for her role as trustee. The
Treasurer is the judgment debtor in this case because, by law, she must be named as the
defendant in suits for relief under the indemnity fund. Under the Counties Code, the expenses
for defending against such suits are paid from the county treasury and not from the indemnity
fund. The Treasurer, as trustee of the indemnity fund, is a constitutional officer carrying out
her public duties for the benefit of the public.
¶ 31 We, therefore, conclude that the Treasurer, as trustee of the indemnity fund, is a
governmental entity and, as the treasurer is the judgment debtor in this case, we further find
that the proper postjudgment rate on indemnity fund judgments is 6%.
¶ 32 Our holding serves the essential purpose for the distinction made by the Interest Act as
to governmental entities. Wade v. City of North Chicago Police Pension Board, 226 Ill. 2d
485, 510 (2007) (“A statute should be interpreted so as to promote its essential purposes and
to avoid, if possible, a construction that would raise doubts as to its validity.”). The Interest
Act provides for a lower postjudgment interest for governmental entities which have limited
means of generating revenues. See generally Barry, 357 Ill. App. 3d at 775 (discussing
prejudgment interest). A 6% interest imposes a lesser burden on the limited resources of the
indemnity fund. In turn, because judgments against the fund cannot be paid unless there are
sufficient monies, our decision has benefits for those who have successfully obtained
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indemnity fund judgments.
¶ 33 D. The Retirement Fund and Taking Cases
¶ 34 In the trial court the petitioners argued that a line of cases relating to retirement funds for
governmental employees, beginning with Barry, required a finding that the indemnity fund
is a “private” entity and, therefore, a 9% rate applied. We do not agree.
¶ 35 In Barry, the Retirement Board of the Fireman’s Annuity and Benefit Fund (Board) was
ordered to pay plaintiffs’ increased widows’ annuity benefits with postjudgment interest of
9%. Barry, 357 Ill. App. 3d at 779. We concluded:
“The fund was not created for the benefit of the general public, but for the benefit of
firemen employed by the City of Chicago who are required by statute to contribute
to that fund. As previously noted, the Board’s primary statutory function is to
administer a pension fund. In the context of the instant case, we find neither the
Board nor the fund performed a governmental function. Accordingly, we find the
Board and the fund do not qualify as ‘governmental entit[ies]’ under section 2-1303
of the Code of Civil Procedure.” Id. at 779-80.
Accord Long v. Retirement Board of the Firemen’s Annuity & Benefit Fund, 391 Ill. App.
3d 681 (2009); Coleman v. Retirement Board of the Firemen’s Annuity & Benefit Fund, 392
Ill. App. 3d 380 (2009); Bell v. Retirement Board of the Firemen’s Annuity & Benefit Fund,
398 Ill. App. 3d 758 (2010).
¶ 36 In Barry, we limited our discussion to the particular context of that case and found
significant the fact that the Board’s primary function was to administer a retirement fund,
which was created for the “benefit of *** firemen, their widows, children and parents.”
(Internal quotation marks omitted.) Barry, 357 Ill. App. 3d at 773. In contrast, the Treasurer
is a public official created by the Constitution and charged, by statute, with the maintenance
of all county monies, including the monies of the indemnity fund. Acting as trustee of any
special funds is part of the Treasurer’s overall public role and duties to secure the integrity
of monies entrusted to her. Our examination of the Counties Code and the nature and purpose
of the indemnity fund demonstrated the public nature of the fund itself and the duties of the
Treasurer as trustee of those funds. Additionally, we note that the amount to be held in the
indemnity fund is determined by the county board, and any excess monies in the indemnity
fund may revert to the county’s general fund. The indemnity fund, consisting of fees
collected from tax purchasers by the county collector, is available to indemnify any qualified
person who has lost property due to a tax sale under the Property Tax Code and is an
essential part of the Property Tax Code. The indemnity fund was created to strike a balance
between the need to generate property taxes by returning delinquent property to the tax rolls
and alleviate the harsh results to those who have lost their property.
¶ 37 Furthermore, the Counties Code declares that “county moneys” include all monies
received by the county treasurer when acting as treasurer or other official capacity “to
whomsoever belonging.” 55 ILCS 5/3-11001 (West 2008). Certain monies held by a county
treasurer, however, have been held to be “private property” under circumstances which are
not analogous to our case. Morton Grove Park District v. American National Bank & Trust
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Co., 78 Ill. 2d 353 (1980).
¶ 38 In Morton Grove Park District, the supreme court considered whether the county
treasurer’s retention of interest earned on a condemnation award, deposited by the park
district with the county treasurer pursuant to the Eminent Domain Act, violated the taking
clause of the federal and state constitutions. Morton Grove Park District, 78 Ill. 2d at 357.
The taking clause prohibits the taking of private property for public use without just
compensation. Id. at 362. “The word ‘property’ as employed in the taking clause of the
Federal and Illinois constitutions include[s] every interest anyone may have in any and
everything which is the subject of ownership, together with the right to possess, use, enjoy,
and dispose of the same.” Id. An owner of a condemned property has a constitutional and
statutory right to appeal an eminent domain judgment. Id. at 359. However, the award to the
condemnee must be deposited with the county treasurer during the appeal and may not be
withdrawn unless the appeal is abandoned. Id. The supreme court concluded that the award
money stood “in the place” of the condemned property and, therefore, was private property
subject to protection under the taking clause of both the state and federal constitutions. Id.
at 362. The court found any interest earned on the award was incidental to the condemnee’s
ownership of the award. Id. at 362-63. The county treasurer had argued that the interest
belonged to the county fund under the definition of “county moneys.” The supreme court,
in order to avoid an interpretation that was subject to a constitutional challenge, concluded:
“we must construe ‘to whomsoever belonging,’ as contained in the definition of county
monies in section 1, as referring to money other than that which constitutes private property.”
Id. at 364.
¶ 39 There is no constitutional issue under the taking clause raised here. The condemnation
award in Morton Grove Park District was a liquidated amount held by the county treasurer
for safekeeping for a particular person. The indemnity fund, in contrast, consists of monies
held for future awards for unspecified persons and excesses in the indemnity fund may revert
to the general fund of the county. The indemnity fund falls within the definition of county
moneys and is not “private property” under Morton Grove Park District.
¶ 40 III. Conclusion
¶ 41 For the foregoing reasons, we find that in this case the applicable postjudgment interest
rate under the Interest Act was 6% per annum. We therefore reverse the order of the circuit
court and remand for further proceedings consistent with this opinion.
¶ 42 Reversed and remanded.
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