February 03, 2006

Jenner & Block recently asked the U.S. Supreme Court to decide how much additional effort a party should have made in locating a property owner before taking possession of the property purchased at a tax sale, and after its mailed notice was returned as “undelivered” with the notation "person is hospitalized."

The Petition for Writ of Certiorari was filed on a pro bono basis on behalf of Cook County Public Guardian Robert F. Harris, as supervised administrator of the Estate of Mary Lowe, a woman whose home was sold to Apex Tax Investments, Inc. while she was hospitalized for mental illness. 

Although Ms. Lowe had regularly paid all property taxes until 1991, Ms. Lowe failed to pay property taxes for that year in the amount of  $110.65.  Pursuant to the Illinois statute, Ms. Lowe was entitled to redeem her property by paying those taxes within a certain period of time.  The tax purchaser Apex was required to notify Ms. Lowe of this redemption period, either in person or by undertaking a “diligent inquiry” to locate and serve her with notice. 

After Apex's efforts to serve Ms. Lowe personally were unsuccessful, notice was sent by certified mail to Ms. Lowe's home.  A letter carrier whose route had included Ms. Lowe’s home for a number of years marked the envelopes with “person is hospitalized” and notified the post office of Ms. Lowe’s hospitalization.  The marked mail was eventually returned to Apex and filed with the court.  Ms. Lowe, who remained hospitalized at a state mental health facility during this redemption period, was never served with notice.

Apex “could have identified Ms. Lowe’s location through reasonable (indeed, minimal) additional efforts simply by following up on the letter carrier’s notation, or questioning the neighbors,” and, therefore, the company’s efforts were not sufficient to satisfy due process requirements, the authors of the Petition told the Court. 

In a 1996 ex parte proceeding, a circuit court judge issued a tax deed to the company, ruling that Ms. Lowe’s redemption time had expired and that the company had exercised due diligence in finding her.  The court later appointed the Public Guardian to represent Ms. Lowe's interests.  The Public Guardian asserted that Apex had notice of Ms. Lowe’s hospitalization by virtue of the letter carrier’s notations, and that its failure to look into her whereabouts further constituted a failure to undertake diligent inquiry.  

The Circuit Court of Cook County ultimately ruled that the company had no duty to follow up on the notations.  The Illinois Appellate Court affirmed that ruling, and in October 2005 the Supreme Court of Illinois rejected all arguments made by the Public Guardian on behalf of Ms. Lowe.  

The authors of the Petition suggested that the Court hold the Petition pending its review of case now pending in the Supreme Court, Jones v. Flowers, which addresses one of the questions presented in Ms. Lowe’s case: whether a party has any duty to take further action when a notice is returned undelivered.  However, the authors argue that Ms. Lowe's case raises an additional question not presented in Jones, namely, whether the Due Process Clause requires the notice-giving party to undertake reasonable additional efforts when the returned notice reveals information likely to lead to the owner’s actual whereabouts.

The legal team was led by Appellate and Supreme Court Practice Co-Chair Barry Sullivan and includes Jenner & Block Chairman Jerold S. Solovy, Of Counsel Benjamin K. Miller, and Associates Denise Kirkowski Bowler, Anders C. Wick, and Benjamin M. Vetter, as well as Robert F. Harris, the Public Guardian, and two of his colleagues, Kass Plain and Charles Golbert. 

The case is Estate of Mary Lowe, by Robert F. Harris, Cook County Public Guardian and Supervised Administrator v. Apex Tax Investments, Inc. and John Herndon.