SIXTH DIVISION February 9, 2007 No. 1-05- 3010 NEW HO LY TEMPLE MISSIONA RY BA PTIST ) Appe al fro m the CHU RCH , a n Illinois No t -Fo r- Pr ofit Co rp or at ion, ) Ci rcu i t Cou rt of ) Co o k C o un t y, Pe ti ti on er -A pp el l an t, )

) v. ) No. 04 COTD 1708 ) DISCOUNT INN , INC.; M ARIA PAPPA S, ) Ho no r ab le Cou n ty Tre as ur er an d C oun ty ) Mars ha D. Hay es, Col l ec tor of Coo k C oun

ty ; DA VI D O RR, C oun

ty ) Presidi

ng. Cl erk of Cook County; JA MES M. HOULIHAN, ) As se ss o ro f Co o k C o un t y, ) ) Respondents-Appellees. ) PR ESI DI NG JU STI CEFI TZ GE RA

LDSM ITH

de l i v ered th e op i n i on of th e c our t: New Ho ly Temple Missio nar y Bapt ist C hur ch ( t he chu rc h) a ppe als t he judg ment o f the ci rc ui t cou rt gra n ti n g res pon den t Disc oun t In n , In c. ’s moti on to dism i ss th e ch urch ’s moti on to vacate the circuit cou rt ’s or der g rant ing the respo ndent’s pe tition for a ta x deed for the chur ch’s parki ng l ot. Appe l l ees

Mari a Pap pas , Dav i d Orr a nd J am es H oul i ha n (tax i ng of f i cial s) we re gr ant ed lea ve t o be co me app ellants pur sua nt t o S upr eme Co ur t Rule 3 66. 155 Ill. 2d R. 366 . We
re v er se an d g ra n t th e ch ur ch ’s peti ti on to v ac ate th e c i rc ui t cou rt’ s g ra n ti n g of th e ta x de ed to Disco unt Inn. The ch ur ch i s a re l i gi ous org an iza ti on wi th a ch urch an d p ar ki n g l ot loca ted on Sou th Pulas ki i n Ch ic ago. The church property consists of two parcels of l and, 16-22-407-040-0000, upo n which t he chu rc h building is loca t ed; a nd pa rc el 16- 22- 407 -0 41- 000 0, upo n which t he subjec t pr op er t y, a p ar king lo t , is lo cat ed. Disco unt Inn ( t hro ugh a n assignment ) p ur chas ed t heNo. 1-05- 3010

2

parkin g lot at a forfei

ture t ax sal

e for the del

in quent 2001 (1999 second i nstallm ent and 2000) gen eral re al estate tax es an d w as i ss ue d a tax de ed i n Ja n ua ry 20 05 to th e ch

urch ’s pa rki n g l ot. From 1986 through 1998, the parki ng l ot had b een l

is ted on the Coo k County tax
asse ssment ro lls as 10 0% exempt fro m taxa t ion. Fro m 199 9 t hro ugh 2 003 , bo t h par cels, t he ch urch and the parki ng l ot, were l i sted on the C ook County

tax a sse ssm

en t rolls; the p arce l s we

re no lo nger exempt . U po n disco ver ing t his, t he chu rc h obt ained c ou nsel t o c or re ct t he as sess ment roll s to ref l ect tax ex em pti on. In 20 03 th e ch

ur ch f i l ed wi th th e C ook C oun

ty Boa rd of Rev i ew se ek i n g to ex em

pt b oth par cels. The boa rd re co mmended e xempt ion. On Aug ust 28, 200 3, t he su bject pr op er t y, t he par king lo t , w as so ld at a fo rfeit ur e sa le of d elinquent t axes for t he ge ner al ta xes. The sec ond i nstal l men t of 199 9 an

d both i nstal l men ts of th e y ear 20 00 we

re i nc l uded i n the f orfe i ture buy . The sal e of the ch

urch parcel

was sub sequentl

y v acated. But t he ch

urch did not seek a vacation of the sal

e of the parki

ng l ot taxes. The sal

e of the taxes f

or t he parki

ng l ot was assi

gned t o a ppe llee Disco unt Inn. In De cem b er 20 04th e ch

ur ch f i l ed certif i ca te- of -e rror appl i ca ti on s wi th th e C ook C oun

ty ass ess or seek

i ng to corre ct the tax

record to ref

l ect tha t both pa rcels we re ex em pt for the y

ears 2000 through 2002. The Cook Co unty assessor approved those applic ations. In Septem ber 200 4, th e Il l i noi s D ep artm

en t of Reve nu e i ss ue d a de ci si on e xe m pti ng both pa rce l s f rom taxati on f or 20 03 a nd su bs eq ue nt ta x y ea rs . The c hu

rch the n f i l ed an i njun cti on s ui t se ek i ng an exem ption fo rbo t h p ar ce ls fo rt he t ax yea r s p r io rt o t he yea r20 00
. T ha t ac t io n r ema ins p en din g a s o f t his ap pe al.No. 1-05- 3010

3

In Ma y 2004 t he o wner of t he t axes fil ed a not ice o f ta x sale. Dur ing t he no t ice-s er ving period the record owner of the subj ect proper ty was New H oly Templ e M.B. Church , a diss olve d Il l i n oi s n ot-f or-p rof i t cor porati on an d p re de ce ss or of

th e ch urch . B en

n y Sm oth er s a s a

gen t, director and off

ic er of the predecessor church, the predecessor church, an d Mari e Smothers, an off ic er and di

rector of the predecess or church, were all s erved i n a tim el y m ann er. A l egal

notice
was published in the C hicago Daily Law Bu lletin as w ell. The per iod of r ede mpt ion fo r t he parkin g lot parcel e

xpi red on September 20, 2004. In October 2004 the owner of the taxes f il ed an ap plicat ion fo r a n or der dire ct ing t he co unt y clerk t o iss ue a t ax de ed a nd ap plicat ion wit h t he ci rcui t court. Af ter a pro ve-up, the ci

rcuit court issued an

order directin

g the County Cl

erk to is sue a tax de ed to Di sc oun

t In n f or th e p ark

i ng l ot. On Ma rch 23, 200 5, th

e c hu rch f i l ed a p eti ti on unde r se ct ion 2 -1 401 of t he Co de o f Civil Pr oc edu re (7 35 I LCS 5/ 2- 140 1 ( West 200 4) ) se eking to vaca te the c i rcui t court’s orde

r. Di scoun

t Inn f i l ed a m otion to dis m i ss. Th e ci rcui t court gr an t ed Dis co un t I nn’ s mo t io n t o dis miss t he ch ur ch ’s 2- 14 01 se ct io n p et it io n t o va ca t e. T his tim el y a ppeal followed. On appeal, t he church arg ues t hat t he circuit co urt erre d by granting Discount Inn’s motion to dism

is s, fi ndi ng that the church

la cked standi

ng. A section 2-615 motion to dism is s (735 ILCS 5/2-615 (West 2002)) chal le nges the l egal suf f i ciency of a com plai nt b ase d on de f

ects a ppare nt on i ts f ace . Marshal

l v . Burger Ki

ng Corp. , 22 2 I ll. 2 d 4 22 , 42 9 ( 20 06 )
. I n r ev iew ing t he su fficie nc y o f a c o mpla int , we ac ce pt as t rue all well-pl eaded f acts and al

l reas onabl

e i nf erences that m

ay be drawn from those facts an

d weNo. 1-05- 3010

4

construe the

al l egati ons i n the com plai nt i n the l i ght m ost fa vorabl e to the pl

ai ntif f
. Ma r sha ll , 222 I ll. 2 d a t 42 9. A c au se o f ac t io n sh o uld no t be dis miss ed pu r su an t t o se ct io n 2
- 61 5 u nle ss it is cle ar ly ap pa r en t t ha t no se t o f fa ct s c an be pr o ve d t ha t wo ul d e nt it le t he pl ain t iff t o r ec o ve ry. Canel v. Topinka , 21 2 Il

l . 2d 311 , 31 8 (2 004 ). W

e re vi ew an orde r gran ti ng or de ny i ng a s ec ti on 2- 615 mot ion de novo
. Ma r sha ll , 222 Ill . 2d at 429. “The d oc t rine o f sta nding r equ ires t hat a pa rt y have a r eal inte re st in the a ct ion br ou ght and i ts out come.” Bridge stone/Fi restone, Inc. v. Al

dridge , 17 9 I ll. 2 d 1 41 , 14 7 ( 19 97 )
. I n t his
ca se th e ch ur ch cl ea rl y h ad a g en ui n e i n terest i n th e ou tcom e of i ts s ecti on 2- 14 01 peti

ti on to vaca t e t he t ax de ed jud gment . I t pr eviou sly owne d t he chu rc h par king lo t and t he gr ant ing o f the t ax de ed e ssent ially

t ra nsferr ed o wner ship fro m the c hur ch t o D isco unt Inn. It use d bo t h t he church a nd the parki

ng l ot at the time

it f il ed i ts petition to vacate. Therefore, the church h ad standi ng. Disco unt Inn c ont ends t hat t he chu rc h did no t have s t anding be cau se it did no t have t he capaci ty to sue as a resul

t o f the f act that it was no longer a corporation durin g the tax y

ears at is sue and i

ts fi ve y ears to sue under section 12.80 of the B usi ness Corpor ation Act of 1983 (805 ILC S 5 /1 2. 80 ( West 200 4) ) ha d exp ired when it fil ed it s mot ion t o va cat e. Disco unt Inn e xplains that the owne r of re cord at the

tim e of the n otice serv i ng p eriod wasthe chur

ch ’sprede ces sor, New Ho ly Temple M. B. Chur ch, a disso lved I lli nois no t -fo r- pr ofit co rp or at ion. In o rd er t o ha ve st anding, a plaint iff need s o nly a real int er est in the a ct ion and t he capa ci ty to sue. York Woods Co mm uni ty As s’n . v. O’Brien , 353 Ill . App. 3d 293, 297-98 ( 20 04 )
. Bo t h o f t he se r eq uir eme nt s w er e me t . Fir st , t he ch ur ch us ed t he pa rkin g lo t co nt inu o us lyNo. 1-05- 3010

5

and up un til it f il ed i ts petition to vacate the judgm ent. Second, Discount Inn ign ores the fact that the church

was rei nstated under a new n

am e and thus was

considered “as i

f i t has not been di ssol ve d.” 80 5 ILC S 105/ 112.45 (d) (West 200 4). Ev en i f the chur ch had not reg i stered

und er a new nam e, i t was a n un i nc orporated as soci

ati on an d ha d the ab i l i ty to bri ng a l awsui t in i ts na me. See 7 35 I LCS 5 /2- 209 .1 ( West 200 2); Yo rk Woo ds C ommunit y Ass’n. , 353 Ill . App. 3d at 297- 98 . Therefor e, Discount Inn’s argument fai ls. Next, the church an

d the taxi ng off ic ia ls argue that the circui

t cour t erred by f

in din g that the church

was not dil

ige nt in bri ngi ng i ts motion to vacate. The church a ls o argues that it was di l i gent i n pres en ti ng a m eri toriousde f

ense . Disc oun

t In n c onte nds th at th e c hu rch wa s n ot di l i gen t b ec au se i t wa s s er v ed wi th n oti ce of th e ta x de ed proce ed i ng i n Ma y 20 04an d “ f ai l ed to redeem from the tax sale and di

d not appear in c ourt to attempt t o prevent the is suance of the tax deed .” T o pr ev ail o n a mo t io n t o va ca t e t he mo va nt mus t es t ab lish t ha t it : ( 1) wa s d ilige nt in presenti ng i ts section 2-1401 petition; (2) was di li gent in presenti ng i ts defense; an

d (3) had a merito riou s defense. 735 ILCS 5/2 -14 01 ( West 200 4); Smi th v. Ai roo m In c. , 114 Ill . 2d 209, 220 -2 1 ( 198 6) . Whe t her a se ct ion 2 -1 401 pet itio n sho uld be g ra nt ed lies w ithin t he so und di scre tion of the ci rcui t court, depen

di ng u pon the f acts a nd e qui tie s pre sen

ted. Sm i th , 114 Ill . 2d at 22 1. A r ev iew ing co ur t will no t dis t ur b t he jud gme nt o f t he cir cu it co ur t un les s t he cir cu it court ab use d i ts di scre tion
. Sm i th , 114 Ill . 2d at 221. “In addressi ng the el em ent of dili gence, co ur t s ar e pr imarily

co ncer ned w ith d et er mini ng whe t her a pa rt y has willf ully disrega rd ed t he process of the court o r is s o indi ff erent to it that he i s chargeable with c ulpa ble negl ige nce.” KleinNo. 1-05- 3010

6

v. S t eel Cit y Nat ional Ba nk , 212 Ill . App. 3d 629, 638 (1991). Furt her, “the tri al court ma y rel ax or ex cu se the exerc i se of di l i ge nc e w he n n ec es sa ry to prov i derel i ef f rom an unf ai r, u njus t, or unconsci onabl e j udgme nt.” K ul i kow sk i v. La rs on , 305 Il

l . Ap p. 3d 11 0, 114 ( 1999)
. In thi s c as e, th e c hu rch pre sente d un

con tes ted ev i denc e that the c hu

rch ’s pa stor reasonabl y b elie ved that the church

parkin g lot parcel a

nd the ch urch parcel

were both 100%
exem pt from taxati on for 1999 through 2003 when , in fact the parcels were i

ncl uded on the tax roll s as taxab le

propert y. Upon discoveri ng that the parcel s were on the rolls, the church obtaine d
cou ns el to correc t the

as se ssmen

t rec ords to ref l ec t the exem ption. A l l

prop er d ocu men tati on was fil ed w ith t he Co ok Co unt y Boa rd of Re view which r eco mmended t hat bot h par cels be
exem pte d f or th e ta x y ea r 20 03 a nd su bs eq uent y ea rs . The c hu

rch the n f i l ed certi f i ca tesof err or ap plic at io ns f

o rt he t hr ee yea r s p r io rt o t he yea r20 03
. T he ap plic at io ns w er e a pp r o ve d. T his pr o ce ss wa s be gu n 1 5 mo nt hs b efo r e t he iss ua nc e o f t he t ax de ed o r de r . T hu s, t he ch ur ch wa s in the process of clearin

g up the tax errors when the tax deed was is sued. The f

act that t he ch

urch did no t fil e its sec t ion 2 -1 401 pet itio n t o va cat e unt il 21⁄2 mont hs aft er t he t ax de ed w as issu ed a nd did n ot attempt t o prevent the tax deed sal e i s bel ie d by the fact t hat, durin

g that t im e, the church was attemptin

g to cl ear up the tax-exem ption probl em s. Accordin gly , we fi nd that the church

was suf f i ci en tl y di l i gen t i n b ri n gi n g i ts s ecti on 2- 14 01 peti

ti on to v ac ate th e ta x de ed j udgm en t, particularly

in li ght of the harsh

resul t o f issui ng a tax deed to propert y tha t was later declared tax
ex em pt. The chur ch and t he t axing o ffi cials also ar gue t hat t he t rial co ur t er re d by finding tha t t he church di d not have a m

eritorious def

ense. The

y e xpl ai n that the parkin

g lot was tax exem

ptNo. 1-05- 3010

7

be ca us e i t wa s u se d s ol el

y f or ch urch p urp ose s. D i sc oun

t In n a rguestha t the pa rki ng l ot wa s n ot tax exem pt b ec au se

pri or to th e ta

x s al e the p ark i ng l ot ha d n ot be en de cl are d e xe m pt f rom t axat ion. Under a section 2-1401 petition to vacate, t he church di d not need to show that its defense would ul tim atel y prev ail at tria l i n orde r to estab l i sh

the existen

ce of a m eri torious def en se. Kul ikowski , 30 5 I ll. A pp . 3d at 11 6. Ho we ve r , t he ch ur ch ha d t o pr es en t su fficie nt fac t s w hic h, if be l i ev ed b

y the tri er of f act, woul d def eat Discoun

t Inn ’sclai

m . Kul ikowski , 305 Ill . App. 3d at 116. Nevertheless, we f

in d that t he ch

urch did present suf

fi ci ent evi dence to support its cl

ai m that i t was tax ex em pt duri ng th e y ears i n qu esti on. In i ts s ec ti on 2 -14 01 p eti

ti on th e c hu rch al l eg ed the pa rki ng l ot wa s exe

m pt f rom taxati on for the y ears i n question under section 22-45 of the Propert y Tax Code. 35 ILCS 200/22-45 (West 20 04 ). S ecti on

22 -4 5 p rov

i de s i n pa rt: “Tax d eed s issue d und er Sec t ion 2 2- 40 a re incont est able exc ept by appe al fro m the orde r of the cou rt di recti ng the cou nty cl erk to i ss uethe tax de ed . How ever, rel

i ef f rom su ch o r de rmay be ha d u nd er Se ct io n 2
- 14 01 o f t he Co de o f Civ il Pr o ce du r e in t he sa me ma nne r and to t he sam

e extent as m

ay be h ad under that Section wi

th respect to fi

nal orders and judgm

ents i n other proceedings . The grounds for relie f un der Section 2-1401 sh al l be l i m i ted to:
*** (2) proo f that the property was exem pt from taxati on[.]” 35 ILCS 200/22- 45 (W est 200 4).No. 1-05- 3010

8

Court s look t o t he Il

li nois Constitution to determin e i f a parce l i

s tax exem

pt for purpo ses of secti on 22-45. See In re Wa rd , 3 11 I ll. App. 3d 3 14, 318 (1 999 ). Art icle IX, sec t ion 6 , o f the Ill in ois Constitut ion provides:

“The G ener al Assembly by law may exempt fro m taxa t ion o nly the pr op er t y of t he State , un i ts of l ocal govern men t an d s ch ool di stri ctsan d pr operty us ed excl us i ve l y f or agri cul tural and horti cul tural societi es, a

nd f or sch ool, religious , ce met er y and ch ar it ab le purposes.” (Emphas is

added.) Ill . Const. 1970, art . IX, §6. Court s al so look to the Propert y Tax Code (35 ILCS 200/1-1 et seq . ( West 200 4) ) t o d et er mine wh ethe r a par cel i s tax ex em pt. See, e.g , Swank v . Department of Rev enue , 336 Ill . App. 3d 851, 856 (200 3). Se ction 15-40 o f the Proper ty Tax Code pro vides:

“Rel igi ous pur poses, o rphanages, or school and reli gious purpo ses. (a) Property used

ex cl usi ve l y f or: (1) reli gious purposes; * * *

* * * qu al i f i es f or e x em pti on as l ong a s i t i s n ot us ed wi th a v i ew to prof i t. (b) Pr op er t y that is ow ned by (1) churches[.]” 35 IL CS 20 0/15-4 0 (West 200 4). T he ch ur ch pr es en t ed un co nt r o ve r t ed ev ide nc e t ha t t he pa rkin g lo t ha d b ee n u se d s o lely and co ntinuously f

or church pur pose s and withou t a view for p ro fi t. The fact t hat Disco unt I nn’s wit ne ss t es t ified t ha t t he pr o pe r t y wa s no t fen ce d, ha d n o sig ns a nd wa s no t impr o ve d is o f lit t leNo. 1-05- 3010

9

signifi cance b ecause the property was a parki ng l ot . Moreo ver, the church had f il ed for tax
exem pt stat us f or t he parki

ng l ot for the tax y

ears i n question. Giv

en that the church

had b een granted tax exem

pt stat us f or t he parki

ng l ot for past and sub sequent y ears and was

tax exem pt un der the I l l i

n oi s C on sti

tuti on (Il l . C on st. 19 70 , a

rt. IX, §6 ) a

n d S ecti on

15 -4 0 of th e P rop er

ty Tax Code (35 ILCS 200/15-40 (West 2004)) and had us ed the parkin g lot continuousl

y, we bel ie ve the ch urch presen

ted a meri to rious def

ense. In f act, t he ch

urch was sub sequentl

y gran ted t ax- exempt st at us fo r t he pa rk ing lot for t he year s in que st ion. Acco rd ingly, we find t hat t he ci rcui t court erred b

y gran tin g Di scoun

t Inn ’smotion

to dis m i ss th e ch urch ’speti

tion to vaca te. Discount Inn cites Fir st Lie n C o . v. Ma rkle , 31 Ill . 2d 431 (1964), and La Sal le National Bank as Trustee v. Hoffm

an , 1 I l l . A

pp . 3d 47 0 ( 19 71 ), to s

uppor t i ts a rgum en t. H owev er , b oth
cas es a re fact ually distingu ishable fro m the c ase at bar . I n t he ca ses c ited by Disco unt Inn, t he pa rti esse ek i ng own ers hi p of the prop erti esdi d n ot cl ai m tha t the prop erti eswere exe

m pt f rom taxa tion
. Fi rs t Li en Co. , 31 Ill. 2d a t 4 37; La S alle Nat ional Ba nk , 1 I ll. A pp . 3d at 47 7. I n t his
cas e, we fo und t hat t he pa rk ing lot was exempt fro m taxa t ion. The re for e, t he ca ses c ited by Di scoun t Inn are n ot controll

i ng. We re ver se t he circ uit co ur t ’s gr ant ing o f Disco unt Inn’s mot ion t o d ismi ss and gr ant t he chur ch’s mo t ion t o va cat e t he circ uit co ur t ’s judg ment g ra nt ing Disco unt Inn a t ax de ed t o t he ch urch ’sparki

ng l ot pursua nt to Suprem

e Court Ru

l e 366 (a)(5). 1 55 Il

l . 2d R. 3 66(a)( 5). Reversed. JOSEP H GOR

DON a nd McNULTY, JJ ., conc

ur.No. 1-05- 3010

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