NOTICE

Decision filed 09/07/16. The text of this decision may be NO. 5-15-0282 changed or corrected prior to the filing of a Peti ion for Rehearing or the disposition of IN THE the same.

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

SCOTT BUEKER, VIRGIL STRAETER, and ) Appeal from the RICHESON REAL ESTATE, LLC, ) Circuit Court of ) Madison County. Plaintiffs-Respondents, ) ) v. ) No. 13-L-276 ) MADISON COUNTY, ILLINOIS; FRED BATHON; ) KURT PRENZLER, in His Official Capacity ) as Madison County Treasurer; JIM FOLEY; ) ALAN J. DUNSTAN; MARK VON NIDA; BARRETT ) ROCHMAN; KENNETH ROCHMAN; BLUE ) SKY VINEYARDS, LLC; CDBR, LLC; SABRE ) GROUP, LLC; SI SECURITIES, LLC; DENNIS ) BALLINGER, JR.; EMPIRE TAX CORPORATION; ) VISTA SECURITIES, INC.; JOHN VASSEN; ) JOSEPH VASSEN; V.I. INC.; SCOTT McLEAN; ) LAND OF LINCOLN SECURITIES, LLC; PRAIRIE ) STATE SECURITIES, LLC; ROBERT LUKEN; ) LUKEN INVESTMENT CO.; SCOTT SIERON; ) RAVEN SECURITIES, INC.; ILLINOIS MOBILE ) HOMES, LLC; ILLINOIS REALTY GROUP ) HOLDINGS, LLC; ILLINOIS REALTY GROUP, ) LLC; JOHN W. SCOTT; EDWARD BEASLEY; RLI ) INSURANCE CO.; and WESTERN SURETY ) COMPANY, ) ) Defendants ) ) (Madison County, Illinois; Jim Foley; Barrett Rochman; ) Kenneth Rochman; Blue Sky Vineyards, LLC; CDBR, LLC; ) Sabre Group, LLC; SI Securities, LLC; Dennis Ballinger, ) 1 Jr.; Empire Tax Corporation; Vista Securities, Inc.; John ) Vassen; Joseph Vassen; V.I. Inc.; Scott Sieron; Raven ) Securities, Inc.; Illinois Mobile Homes, LLC; Illinois Realty ) Honorable Group Holdings, LLC; and Illinois Realty Group, LLC, ) William J. Becker, Defendants-Petitioners). ) Judge, presiding. ________________________________________________________________________

JUSTICE WELCH delivered the judgment of the court, with opinion. Presiding Justice Schwarm and Justice Chapman concurred in the judgment and opinion.

OPINION

¶1 The plaintiffs, Scott Bueker, Virgil Straeter, and Richeson Real Estate, LLC, filed a

motion for class certification. The plaintiffs sought to recover damages for alleged losses

resulting from the manner in which former Madison County Treasurer Fred Bathon

conducted property tax sale auctions from 2005 through 2008. Following a hearing, the

circuit court of Madison County granted class certification. For the reasons that follow, we

affirm in part as modified, vacate in part, and remand for further proceedings.

¶2 Every year the Madison County Treasurer collects taxes on real property on behalf

of taxing districts within the county. 35 ILCS 200/19-35, 20-5 (West 2012). If property

owners fail to make timely payments, an automatic penalty of 1.5% is assessed for each

month that the taxes are not paid. 35 ILCS 200/21-15, 21-20 (West 2012). Where the

property taxes remain delinquent, the Property Tax Code sets forth the statutory procedure

for the collection of the delinquent property taxes. 35 ILCS 200/21-70 et seq. (West 2012).

¶3 After various procedural steps, a tax sale is held where individuals and companies

(known as tax buyers) have the opportunity to buy the right to collect the delinquent taxes

from the delinquent taxpayers. 35 ILCS 200/21-70 et seq. (West 2012). The tax sale is

2 conducted on a parcel-by-parcel basis. The tax buyers do not bid a dollar amount for each

parcel with delinquent taxes. Instead, the tax buyers bid a penalty (interest) rate that they are

willing to charge the owner if the owner later redeems the property. 35 ILCS 200/21-215

(West 2012). The penalty rate can range by statute up to 18%, which is the maximum

allowed by law. 35 ILCS 200/21-215 (West 2012). If there are no bids on a particular

parcel, its delinquent taxes are awarded to the State of Illinois. 35 ILCS 200/21-225 (West

2012). A tax buyer who purchases delinquent property taxes is required to pay the entire

amount of taxes and automatic penalties outstanding as well as open taxes for prior years. 35

ILCS 200/21-240 (West 2012). After the tax buyer delivers payment to the county, the tax

buyer receives a "certificate of purchase" evidencing payment of the taxes. 35 ILCS 200/21-

240, 21-250 (West 2012).

¶4 Property owners have the right to redeem their delinquent property taxes that were

sold at the tax sale. 35 ILCS 200/21-345 (West 2012). In order to redeem the delinquent

property taxes, a property owner must pay all taxes, automatic penalties, and costs paid by

the tax buyer at the time of the sale as well as interest at the penalty rate percentage bid by

the tax buyer at the sale. 35 ILCS 200/21-355 (West 2012). The penalty accrues at the rate

set during the auction and compounds every six months if the property remains unredeemed.

35 ILCS 200/21-355 (West 2012). The increase is equal to the amount of the initial rate

originally bid. 35 ILCS 200/21-355 (West 2012). The statutory period of redemption ranges

from six months to 2½ years depending on the type of property. 35 ILCS 200/21-350 (West

2012). Redemptions occur at the county clerk's office, and the funds received for redemption

are forwarded to the tax buyer once the tax buyer presents the applicable certificate of 3 purchase. 35 ILCS 200/21-355 (West 2012). The county does not retain the taxes or the

penalty rate paid by the property owner. If the property owner fails to redeem the property

taxes, the person or entity holding the certificate of purchase can file a petition for a tax deed,

and, if ordered by the circuit court, the tax deed conveys merchantable title free and clear

from any previous interest in the property. 35 ILCS 200/22-30 through 22-70 (West 2012).

¶5 The class-action plaintiffs are owners of real property in Madison County who failed

to timely pay their real estate taxes and had their delinquent property taxes sold at a tax sale

between 2005 and 2008. The plaintiffs named the following as defendants in the suit:

Frederick Bathon, the former treasurer of Madison County; certain individuals and entities

that purchased delinquent taxes between 2005 and 2008 (collectively "tax purchaser

defendants"); Jim Foley, an employee of the Madison County treasurer's office; Madison

County; and Kurt Prenzler, in his official capacity as the current Madison County treasurer.

¶6 The class-action complaint alleged the following causes of action: (1) civil conspiracy

against all of the defendants except Madison County, Prenzler, and RLI Insurance; (2)

money had and received against all of the defendants except Prenzler, Foley, and RLI

Insurance; (3) violations of section 3(1) of the Illinois Antitrust Act (740 ILCS 10/3(1) (West

2012)) against all of the defendants except Madison County, Prenzler, and RLI Insurance;

(4) violations of section 3(2) of the Illinois Antitrust Act (740 ILCS 10/3(2) (West 2012))

against all of the defendants except Madison County, Prenzler, and RLI Insurance; (5)

violations of section 3(3) of the Illinois Antitrust Act (740 ILCS 10/3(3) (West 2012))

against all the defendants except Madison County, Prenzler, and RLI Insurance; (6) breach of

fiduciary duty against Bathon; (7) an action against Bathon's bond as treasurer and collector 4 of Madison County; and (8) sale in error against Madison County and Prenzler. Madison

County is only named as a defendant in the money had and received count and the sale in

error count.

¶7 The class-action complaint alleged that Bathon and the tax purchaser defendants

conspired to implement a "no trailing bid" policy at the property tax sale auctions, which

required all bidders to bid at once with the winning bid being the lowest bid heard by the

auctioneer. The complaint alleged that the named tax purchaser defendants entered into an

agreement with Bathon that each would bid the statutory maximum of 18% in the

simultaneous bidding. The complaint also alleged that Bathon used a seating chart to ensure

that the tax purchaser defendants were recognized by the auctioneer as winning bidders and

directed the auctioneer to disperse the winning bids from the various auctions between the

tax purchaser defendants. The complaint alleged that Bathon received campaign

contributions in exchange for his participation in the fixed tax sales. The complaint alleged

that the actions of Bathon and the tax purchaser defendants resulted in excessive penalty

rates being bid and that those excessive rates were ultimately charged to delinquent taxpayers

who sought to redeem their property taxes after a tax sale auction.

¶8 The class-action complaint explained that in February 2013, prior to the filing of

the class-action complaint, Bathon pled guilty in federal court to a Sherman Act violation

relating to his handling of the tax sale auctions held in 2005 through 2008. Scott McLean,

Barrett Rochman, and John Vassen, other named defendants in the class action, also pled

guilty to federal antitrust charges stemming from their involvement. As part of their guilty

pleas, these defendants admitted that they reached an implicit mutual understanding that they 5 would typically bid only the statutory maximum interest rate of 18% and not compete to

reduce the interest rate when purchasing property tax liens.

¶9 In the motion seeking class certification, 1 the plaintiffs argued that the four

prerequisites for maintaining a class action had been met. Thereafter, the various

defendants 2 filed oppositions to the motion for class certification. The objections, inter alia,

argued that class certification should be denied, as individual questions predominated over

issues common to the class, specifically with regard to damages. In particular, the

defendants argued that the resolution concerning whether a delinquent taxpayer was

damaged by the alleged wrongful conduct and in what amount would require an

individualized evaluation of each parcel sold at the tax sale, as the amount a tax purchaser

would be willing to bid on a particular tax lien depended on numerous factors and the

subjective judgment of that tax purchaser.

1 The class-action plaintiffs rely on the motion for class certification filed on May 10,

2013, by Geralyn Lindow. Lindow is no longer a class representative because the plaintiffs

sought leave to withdraw certain original plaintiffs, including Lindow, and proceed on their

motion for class certification with Bueker, Straeter, and Richeson Real Estate as the named

class representatives. 2 Because the objections contained similar arguments, we will address them as one for

brevity purposes. Where there are differences in the arguments that are relevant to this

appeal, we will address those differences.

6 ¶ 10 In support of its argument, the defendants pointed to the conclusions reached by the

United States Department of Justice (Department) following an investigation of the tax

auctions. According to the Department, the tax buyers at the tax sale auctions selectively

purchased tax liens based upon a number of subjective variables, such as the location of the

property, the state of repair of the structure on the land, the homeowner's payment history,

the size of the tax bill, the assessed value of the property, and the real estate market where

the property was located. The Department noted that at every Madison County tax sale, even

those conducted with competitive bidding, a significant portion of the sales resulted in

homeowners being charged the statutory maximum 18% penalty rate. It explained that tax

buyers evaluated the risk factors differently and, as a result, were many times unwilling to

purchase certain tax liens unless they received the highest interest rate. The Department

concluded that legitimate economic considerations routinely resulted in many tax liens being

sold for 18% even during a perfectly lawful tax sale that was conducted free of collusion.

The Department concluded that some of the homeowners with delinquent property taxes sold

at the tax auctions would have been charged 18% even had the scheme never existed.

¶ 11 To determine out-of-pocket loss for restitution purposes, the Department was faced

with the task of determining which properties would have received which rates during the

2005 to 2008 auctions in the absence of the alleged conspiracy. Following its investigation,

the Department concluded that the "data can tell us averages, but it cannot tell us with any

level of certainty which particular properties experienced inflated tax bills nor can the data

alone tell us what interest rate would have been bid in the absence of the scheme."

(Emphasis in original.) 7 ¶ 12 The Department further concluded that such a determination would require the

evaluation of a number of subjective variables and that it was entirely impracticable to retain

an expert to review and assess each of the 9299 parcels for which tax liens were sold during

the alleged scheme. In reaching this conclusion, the Department consulted with two experts

in the field of Illinois tax sales. The consensus was that it was not possible to calculate out-

of-pocket loss at the individual level in this scenario. The Department also consulted with

Kent Prenzler, as Prenzler had developed his own methodology for computing the damages.

However, the Department concluded that Prenzler's approach was an estimate based on

averages. The Southern District of Illinois agreed and found that it was "highly

impracticable to perform a complete accounting of the losses to each individual victim given

the complex issues of fact related to the large number of victims." Thus, the court found

that no restitution award could be entered.

¶ 13 Relying on the federal proceedings, the defendants in this class-action case argued

that there were questions unique to individual class members in regard to the issues of

causation and damages, which precluded the use of the class-action device. The defendants

argued property owners would be required to prove, on an individual basis, that the penalty

rate was artificially inflated for that particular property in any given year and not all of the

property owners in the class would be able to prove that the alleged conspiracy caused

damages. Further, the defendants argued that for those class members who were able to

prove that the delinquent taxes on their particular properties would have received lower

penalty rates in the absence of the alleged conspiracy, these class members would also have

to prove what penalty rate would have been awarded for the delinquent taxes on their 8 particular property. Therefore, each property owner would be required to adduce evidence to

prove the amount of damages by proving a specific penalty rate that his particular property

would have received for its delinquent taxes. Because this would require individual trials for

each claimant for each property, the defendants argued that individual issues would

predominate over the issues common to the class.

¶ 14 In addition, the defendants argued that the plaintiffs failed to establish that they or

their counsel would adequately protect the interests of the class and failed to prove that

pursuing a class action was an appropriate method for the fair and efficient adjudication of

the controversy. Moreover, Madison County filed an opposition to class certification with

regard to the specific counts that were alleged against it, i.e., sale in error and money had and

received. Madison County argued that the plaintiffs had failed to explain how the claims

against it for sale in error and money had and received could be addressed on a class-wide

basis and that the plaintiffs had failed to establish that they had a viable claim for sale in

error and money had and received against Madison County, which was a threshold question

for class certification.

¶ 15 Following a hearing, the circuit court entered an order for class certification. The

court noted that the numbers varied but that it was generally agreed that a significant number

of properties were sold in those years and that the Department noted that almost 10,000

delinquent tax sales occurred in the relevant time. Thus, the court concluded that the

numerosity requirement for class certification was met.

¶ 16 In addition, the circuit court found that the predominance of common questions of law

or fact requirement for class certification had been satisfied. Although the court noted that 9 various defendants were charged with involvement under varying theories of liability in

various counts of the complaint, the court concluded that the central issue was the

involvement of the defendants in the alleged tax sale scheme. The court stated as follows

with regard to the predominance issue:

"If any or all defendants are not liable under any particular theory or count, the jury or

the court can so find. The court fails to see how having multiple trials for what is

essentially the same issue does anything other than create multiple cases and multiple

possibilities for an inconsistent result. If each person whose property was sold for

delinquent taxes in the alleged fraudulent tax sales filed a separate suit alleging

various theories of liability, this court, in the absence of a motion to consolidate,

would likely consolidate the separate claims of the separate plaintiffs for trial on its

own motion. Any unrelated or purely personal claims could be severed."

¶ 17 Furthermore, the circuit court concluded that there was no substantial argument that

counsel for the proposed class was inadequate. As for the adequacy of the class

representatives, the court noted that the class members have had property sold at tax sales in

the years at issue. The court noted that the most relevant issue was the defendants'

involvement in the alleged fraudulent tax scheme, which was generally alleged to be the

same in each year. Thus, the court concluded that the class members, with the possible

10 exception of Richeson, 3 would adequately represent the interest of the class of people

allegedly damaged by the tax sale scheme.

¶ 18 Regarding damages, the circuit court acknowledged that the issue was "somewhat

problematic" and that real estate was unique. However, the court stated as follows:

"The problem is that if the alleged tax sale scheme is proved true, all or some of the

defendants created a system whereby it is difficult if not impossible for an individual

plaintiff to prove that a lower rate would have been bid and what that rate would have

been for a particular piece of property. The court fails to understand how defendants,

if liable, can essentially rig the game so that they can illegally obtain the money and

then say, 'We know we got the money illegally, we know that it belongs to the group

or portions of the group, we don't know which ones of the group are the owners, and

because you, the owners, can't prove your damage, we get to keep the money.' "

¶ 19 The court acknowledged that the plaintiffs did have to prove damages but stated that

liable defendants did not get to keep the money because their conduct made it difficult to

determine the amount of damages. The court concluded that it was satisfied that an

appropriate method to determine damages could be reached.

¶ 20 Thus, the circuit court certified the following class: "all persons who owned any

parcel of property that was sold 4 at a Madison County tax sale auction in the years 2005,

3 The circuit court did not set forth any reasoning as to why Richeson might not be an

adequate class representative. We discuss Richeson in further detail later in this decision.

11 2006, 2007, and/or 2008 and with respect to which a Certificate of Purchase was obtained at

such auction in response to a penalty rate bid of 12% or higher. This class does not include

any property owners whose property was not bid upon at the relevant tax sale and was

therefore forfeited to the State of Illinois."

¶ 21 The defendants filed a petition for interlocutory review pursuant to Illinois Supreme

Court Rule 306(a)(8) (eff. Feb. 16, 2011). This court denied leave to appeal. The defendants

then filed a petition for leave to appeal to the supreme court. The supreme court denied

leave to appeal but entered a supervisory order directing this court to vacate its previous

order denying leave to appeal and to allow the petitions for leave to appeal. On January 6,

2016, this court granted the defendants leave to appeal.

¶ 22 The decision regarding class certification is within the discretion of the circuit court

and will not be disturbed on appeal unless the circuit court abused its discretion or applied

impermissible legal criteria. Smith v. Illinois Central R.R. Co.,

(2006).

In exercising its discretion, the court should err in favor of granting class certification. S37

Management, Inc. v. Advance Refrigeration Co.,

. However,

the court's discretion is not unlimited because the court is bound by and its discretion must be

exercised within the framework of the civil procedure rule governing class actions. Smith,

. In making its decision as to whether to certify a class, the court may

______________________ 4 Real estate is not "sold" at the tax sale auctions. Instead, the right to collect the

delinquent property taxes on a certain parcel of property is what is being sold.

12 consider any matters of fact or law properly presented by the record, which includes the

pleadings, depositions, affidavits, answers to interrogatories, and any evidence that may have

been adduced at the hearings. Gordon v. Boden,

(1991). The

scope of appellate review is limited in that a reviewing court evaluating a circuit court's

decision to certify a class may not undertake an independent, de novo evaluation of the facts.

S37 Management, Inc.,

.

¶ 23 Certification of a class action in Illinois is governed by section 2-801 of the Code of

Civil Procedure (Code), which sets forth four prerequisites for maintaining a class action:

the class is so numerous that joinder of all members is impracticable; there are questions of

fact or law common to the class that predominate over any questions affecting only

individual members; the representative parties will fairly and adequately protect the interest

of the class; and the class action is an appropriate method for the fair and efficient

adjudication of the controversy. 735 ILCS 5/2-801 (West 2012). The party seeking class

certification has the burden of establishing the above statutory prerequisites. Wheatley v.

Board of Education of Township High School District 205,

(1984). The

circuit court must find that the four prerequisites are present before it can certify the class.

¶ 24 Turning to the numerosity requirement, the defendants do not seem to dispute that

the class is so numerous that joinder of all members is impracticable. In its order approving

class certification, the circuit court indicated that the numbers vary but that it is generally

agreed that a significant number of delinquent property taxes were sold from 2005 through

2008, the time period during which the alleged conspiracy occurred. The court noted that the 13 Department had figured that almost 10,000 delinquent tax sales took place in the relevant

time period. This provides an ample basis for the court's decision that joinder of all members

is impracticable. Thus, the court did not abuse its discretion in finding that the first

requirement was established.

¶ 25 We next consider the commonality and predominance prerequisite for class

certification. The statutory requirement is met where (1) there are questions of fact or law

common to the class and (2) these common questions predominate over questions affecting

only individual members of the class. Hall v. Sprint Spectrum, L.P.,

(2007). "Determining whether issues common to the class predominate over individual

issues requires the court to identify the substantive issues that will control the outcome,

assess which issues will predominate, and then determine whether these issues are common

to the class." Smith,

. This inquiry requires the court to look beyond the

pleadings to understand the claims, defenses, relevant facts, and applicable substantive law.

¶ 26 The predominance test is "not whether the common issues outnumber the individual

ones, but whether common or individual issues will be the object of most of the efforts of the

litigants and the court."

. To satisfy this requirement, the plaintiff must

establish that the successful adjudication of the plaintiff's individual claims will establish a

right of recovery in favor of the other class members. Hall,

. Where

the circuit court concludes that common questions of fact or law predominate over the

individual issues, the existence of questions that apply only to individual class members will

14 not defeat the predominating common question. S37 Management, Inc.,

.

¶ 27 With regard to the commonality requirement, a common issue may be shown where

the claims of the individual class members are based upon the common application of a

statute or where the proposed class members are aggrieved by the same or similar conduct or

a pattern of conduct. Clark v. TAP Pharmaceutical Products, Inc.,

(2003). The plaintiff's complaint is based upon allegations of civil conspiracy, breach of

fiduciary duty, money had and received, and violations of the Antitrust Act. 740 ILCS 10/3

(West 2012). 5 The asserted claims are predicated on the allegation that the named

defendants conspired to artificially inflate the penalty rate bid price on delinquent property

taxes at the 2005 through 2008 tax sale auctions. The plaintiffs argue that the common

questions of fact or law in this case include (1) the manner as to how the Madison County tax

sales were conducted for the years in question, (2) whether the defendants made campaign

contributions to Bathon, (3) the number of parcels successfully bid on by each of the

defendants, (4) whether the defendants participated in the conspiracy, (5) whether the "no

trailing bid" policy comported with Illinois law, and (6) whether the "no trailing bid" policy

resulted in increased penalty bids. Because the plaintiffs have identified issues common to

the class, we conclude that the circuit court did not abuse its discretion or consider

5 We will address the sale in error claim and money had and received claim against

Madison County later in this decision.

15 impermissible legal criteria when it determined that a common issue of law or fact existed in

the instant case.

¶ 28 We now turn to the predominance requirement. The tax purchaser defendants argue

that in order for the plaintiffs to bring a claim under the Antitrust Act, the plaintiffs must

have suffered an injury. 740 ILCS 10/7(2) (West 2012). The defendants argue that in

certifying the class, the circuit court failed to account for the fact that in the years before and

after the alleged conspiracy, a significant percentage of the delinquent taxes sold at the

Madison County tax auctions typically went at the maximum 18% penalty rate. Thus, it was

likely that some of the delinquent tax owners would have been charged the 18% penalty rate

even had the alleged scheme never existed.

¶ 29 In addition, the defendants argue that the common questions identified by the

plaintiffs are readily proven in that some of the defendants have pled guilty to the conspiracy

in federal court and that the remaining common questions can be resolved by reviewing

publicly available information relating to the relevant tax sales and campaign contributions.

"[W]hen an individual question does exist which is more time consuming and more difficult

to prove than the common question which is readily proved, that situation tends to negate the

predominant status of the common question." Rodmaker v. Johns Holding Co.,

(1990). The defendants argue that the individualized determinations as to

whether the plaintiffs incurred damages as well as the amount of damages will predominate

over the readily proven common questions. In support, the defendants cite Smith v. Illinois

Central R.R. Co.,

(2006), and Comcast Corp. v. Behrend,

, 133

(2013), for the proposition that class certification is improper where individual

questions overwhelm class issues.

¶ 30 In Smith, a case involving a mass tort personal injury class action arising from a train

derailment exposing plaintiffs to toxic chemicals, our supreme court concluded that class

certification would be inappropriate where proof of proximate causation and damages would

be highly individualized and would consume the bulk of time at trial.

. The

court reasoned that proof of proximate causation would depend on an individual assessment

of a variety of factors, such as whether and to what extent each member of the class was

exposed to the chemicals, and that the members of the proposed class had sought a variety of

types of damages.

. Similarly, in Comcast, the United States Supreme Court

concluded that a class should not be certified where the named plaintiffs in the class-action

suit failed to provide a methodology for calculation of damages on a class-wide basis. 569

U.S. at ___, 133 S. Ct. at 1432-33. The court stated that where damages are not susceptible

of measurement on a class-wide basis, questions of individual damage calculations would

inevitably overwhelm questions common to the class. Id. at ___, 133 S. Ct. at 1432-33.

¶ 31 In response, the plaintiffs argue that the mere fact that damages may need to be

individually calculated does not defeat class certification under Illinois law. See Hall,

(the fact that some members of the class are not entitled to relief will

not bar class certification). Following the litigation of common questions, questions that are

peculiar to individual class members, such as damages, may be determined in ancillary

proceedings.

. "The fact that the class members' recoveries may be in different

amounts, which must be determined separately, does not necessarily mean that the common 17 questions do not predominate."

If individual damage determinations are necessary, the

court can utilize various procedures to determine damages, including the creation of

subclasses.

Furthermore, if the class becomes unmanageable at some later time in the

litigation, the court always has the option to set aside the class certification or a portion of it.

Purcell & Wardrope Chartered v. Hertz Corp.,

(1988).

¶ 32 In support of their argument that the necessity of individual damage calculations will

not defeat class certification, the plaintiff cites Alexander v. Q.T.S. Corp., No. 98 C 3234,

(N.D. Ill. Sept. 30, 1999), a federal district court case that dealt with class

certification in a case involving a similar property tax auction context as the instant case. 6 In

Alexander, the plaintiff filed a class-action complaint alleging that during the 1996 Cook

County delinquent property tax sale, the defendants conspired to artificially inflate the

penalty rate at which delinquent taxes were sold at the tax sale auction.

, at

*1. The district court concluded that the plaintiffs had established commonality, as

establishing the existence of the conspiracy was an issue common to the class. Id.; see Fed.

R. Civ. P. 23(a). Because the plaintiffs sought certification based on Rule 23(b)(3), the

6 Section 2-801 of the Code is patterned after Rule 23 of the Federal Rules of Civil

Procedure (Fed. R. Civ. P. 23), and federal decisions interpreting Rule 23 are persuasive

authority with regard to the determination of class certification in Illinois. Smith,

.

18 predominance requirement was required to be met. 7 See Fed. R. Civ. P. 23(b)(3). The court

concluded that the common issues predominated over individual concerns because any

individual questions that may exist among class members with respect to damages did not

defeat certification of an antitrust class action for liability purposes. Alexander,

, at *4. Thus, the court certified a liability class, noting that if the court determines

that liability has been proven, it will consider the option of certifying a subclass on the

damage issue. Id.

¶ 33 In the instant case, the circuit court certified the following class:

"all persons who owned any parcel of property that was sold at a Madison County tax

sale auction in the years 2005, 2006, 2007, and/or 2008 and with respect to which a

Certificate of Purchase was obtained at such auction in response to a penalty rate bid

of 12% or higher. This class does not include any property owners whose property

was not bid upon at the relevant tax sale and was therefore forfeited to the State of

Illinois."

7 The commonality requirement in Rule 23(a), i.e., the requirement of a question of

law or fact common to the class, is a looser standard than the class certification standard of

predominance required under section 2-801. However, where the plaintiffs move for class

certification based on Rule 23(b)(3), authorization of the class is permitted where the court

finds that the questions of law or fact common to the members of the class predominate over

any questions affecting only individual members.

19 ¶ 34 The court did not specifically limit certification for liability purposes only. At a

hearing concerning the appropriate definition for the class, the court indicated that it would

consider any arguments regarding bifurcation of the trial. The court explained that liability

should be determined first, as it was relatively more straightforward, and then the damages

issue could be determined separately. However, the court did not rule on this issue as the

defendants had indicated their intention to seek an appeal on the issue of certification. Thus,

we will consider whether the order certifying the class for purposes of liability as well as

damages was an abuse of discretion.

¶ 35 Although we recognize that individual questions of injury and damages do not defeat

class certification, we find that the plaintiffs have not demonstrated that individual damages

are calculable on a class-wide basis. See Comcast Corp., 569 U.S. at ___, 133 S. Ct. at 1433

(the plaintiff must show that the damages are susceptible of measurement on a class-wide

basis in order to maintain class certification). This conclusion is supported by the

Department's finding that an individualized review of each particular parcel of property

would be required to calculate restitution and by the fact that the plaintiffs have not provided

any methodology to calculate damages on a class-wide basis. Without a methodology to

calculate damages on a class-wide basis and given the unique characteristics of real property

as well as the subjective nature of the bidding process, we conclude that the calculation of

actual damages would be too individualized to be handled as part of the class action. Thus,

we conclude that the court abused its discretion in finding that the individual issues as to

actual damages would not predominate over the common issues.

20 ¶ 36 That being said, we conclude that it was not an abuse of the circuit court's discretion

to certify a class for liability purposes only, as we find that common issues predominate over

individual concerns involving liability. Although we recognize that four of the defendants

pled guilty to the conspiracy in federal court, the determination of whether the remaining

defendants, including Foley, 8 were involved in the unlawful behavior is still at issue in the

case. Thus, the class members will be required to prove that these remaining defendants

were a part of the alleged conspiracy.

¶ 37 Antitrust conspiracies often have to be proven from inferences drawn from the

circumstantial evidence. Baker v. Jewel Food Stores, Inc.,

(2005).

All class members will rely on the same discovery, same witnesses, and other evidence to

prove the existence of the conspiracy, whether the remaining defendants were part of the

alleged conspiracy, and a causal connection between the conspiracy and any injury.

Accordingly, we amend the class definition to limit the class to liability only. If the court

determines that liability is proved, the court can then consider the possibility of certifying

subclasses on the damages issue or some other appropriate procedure. Alexander,

, at *4.

¶ 38 The defendants argue that different statutes of limitations apply to the various counts

alleged in the plaintiffs' complaint and that the individual statute of limitations issues would

predominate over the issues common to the class. Specifically, the defendants argue that

8 Foley claims that he was not the auctioneer at the tax sale who picked the winning

bids and that he was not even present at the 2008 tax sale.

21 there is a four-year statute of limitations for the antitrust conspiracy action as well as the

conspiracy claim. The defendants argue that the statute of limitations commenced when the

delinquent property taxes were sold at the tax sale auctions. Moreover, the defendants argue

that the plaintiffs' invocation of the discovery rule in their pleadings would result in

individual inquiries to determine whether each class member's claim is time-barred.

Although we recognize that this is an issue that will need to be determined, commonality is

not destroyed where class members may be affected differently by the applicability of the

statute of limitations. Walczak v. Onyx Acceptance Corp.,

(2006).

Thus, we do not find that the circuit court's decision to certify a class action where class

members may be affected differently by the statute of limitations was an abuse of discretion.

¶ 39 Because we have concluded that the common questions predominate over the

individual issues in a liability-only class, we must consider whether the remaining

requirements for class certification have been met. The next class-certification requirement

at issue is whether the plaintiffs have established that they will fairly and adequately

represent the interests of the putative class.

¶ 40 Section 2-801(3) of the Code requires that the representative parties will fairly and

adequately protect the interests of the class. 735 ILCS 5/2-801(3) (West 2012). The purpose

behind the adequate-representation requirement is to ensure that all class members will

receive proper, efficient, and appropriate protection of their interests in the presentation of

the claim. Hall,

. The test applied to determine adequacy of

representation is whether the interests of those who are not parties are the same as those who

are not joined and whether the litigating parties fairly represent those not joined.

The 22 proposed class action plaintiff must be a member of the proposed class, i.e., must be able to

maintain an individual cause of action against the defendant. Ramirez v. Smart Corp.,

(2007).

¶ 41 A representative will not be disqualified merely because his claim is not exactly the

same as the other members of the class. Purcell & Wardrope Chartered,

. "It is only necessary that the representative not seek relief antagonistic to the interests

of other potential class members."

The named representatives' interests must not appear

collusive. P.J.'s Concrete Pumping Service, Inc. v. Nextel West Corp.,

(2004). Moreover, the class attorney for the representative party must be qualified,

experienced, and generally able to conduct the proposed litigation. Miner v. Gillette Co.,

(1981).

¶ 42 Here, the class-action complaint named Bueker, Straeter, and Richeson Real Estate

as the proposed class representatives. Bueker failed to pay real estate property taxes for

2006. The delinquent taxes were sold at the 2007 tax sale, and they were purchased by

defendant John Vassen at an 18% penalty rate. Bueker's mortgage company redeemed the

taxes. Straeter owns eight properties in Madison County where the delinquent property taxes

were sold at tax sales in 2005 and 2007 at an 18% penalty rate. The taxes were purchased by

seven different tax purchasers, two of which were not a party in the action at the time of class

certification. Straeter redeemed all of these delinquent property taxes. Richeson Real Estate,

a business solely owned by Guideon Richeson, had delinquent property taxes purchased in

the 2008 tax sale auction by two nondefendants and defendant John Vassen. Richeson

redeemed those property taxes. 23 ¶ 43 The defendants argue that the plaintiffs have failed to allege any facts indicating that

the named representatives will adequately represent the interests of the class for the

following reasons: (1) the plaintiffs did not have delinquent property taxes sold at the 2006

tax sale; (2) the plaintiffs did not have taxes purchased by all of the named defendants,

particularly Scott Sieron and Illinois Realty Group; (3) the plaintiffs had their taxes

purchased by individuals and entities who are not defendants; and (4) the plaintiffs did not

have a tax deed issued after the tax sale and thus are not representative of anyone who had a

tax deed issued for their property. In addition, the defendants noted that the circuit court,

without explanation, questioned whether Richeson Real Estate was an adequate class

representative and argued that without Richeson Real Estate as a named representation, there

would no longer be a representative plaintiff for the 2008 tax sale.

¶ 44 With regard to each representative, the defendants argued that Bueker could not be a

named class representative in a class action based on the Antitrust Act because the Act

precludes indirect purchasers from pursuing class-action claims. The defendants argue that

Bueker was an indirect purchaser because his lender redeemed the taxes and passed on the

cost, including the interest and penalties, to him by adding it to his mortgage loan. The

defendants argue that Straeter is not an adequate class representative in that his claims are

time-barred. Last, the defendants argue that Richeson Real Estate was not an adequate

representative because Richeson is a business entity whose interests, goals, and financial

expectations differ from putative class members whose parcels contained their personal

homes.

24 ¶ 45 The circuit court concluded that the class members have had delinquent taxes sold at

tax sales in the years at issue and that the most relevant issue is the involvement in the

alleged fraudulent tax scheme, which was generally alleged to be the same in each year. The

court noted that it was satisfied that the class members with the possible exception of

Richeson would adequately represent the interest of the class of people allegedly damaged by

the tax-sale scheme. Thus, the court found that the adequacy of representation requirement

is met. The court also concluded that there was no substantial argument that counsel for the

proposed class was inadequate.

¶ 46 The interests of the named plaintiffs are the same as those of the absentee class

members, i.e., to seek damages for any inflated penalty rates and redemption amounts that

resulted from the alleged conspiracy. Every named class representative had their delinquent

property taxes sold at the tax sale auction during the time period that the alleged conspiracy

occurred. Each class representative redeemed the property, potentially paying inflated

penalty fees that were the result of the alleged conspiracy. Thus, we conclude that the circuit

court did not abuse its discretion in finding that the adequate-representation requirement was

met. If the adequacy of the representation by the named plaintiffs becomes an issue or is

questioned at a later time, the circuit court could, if necessary, modify the class structure or

decertify the class. See Purcell & Wardrope Chartered,

. With

regard to the allegation that Bueker could not maintain an antitrust class action as an indirect

purchaser, if the court determines that the allegation has merit, the court could modify the

class structure to reflect that finding. Further, the court found that there is no substantial

25 argument that counsel for the proposed class is inadequate. We conclude that this finding

was not an abuse of the court's discretion.

¶ 47 We now turn to the fourth requirement for the maintenance of a class action, i.e.,

whether the class action is an appropriate method for fairly and efficiently adjudicating the

controversy. See 735 ILCS 5/2-801(4) (West 2012). In determining whether this

requirement has been met, the circuit court considers whether a class action can best secure

the economies of time, effort, and expense and promote uniformity or whether a class action

can accomplish the other ends of equity and justice that class actions seek to obtain. Gordon,

.

¶ 48 Here, the class action certification for the purpose of liability is an appropriate method

for fairly and efficiently adjudicating the liability issue. Where the first three prerequisites

for the maintenance of a class action are established, it is evident that the fourth requirement

has been fulfilled as well. See Hall,

. Because we have concluded

that the first three prerequisites have been met with regard to a class certified for liability

purposes, we may consider the fourth requirement fulfilled.

¶ 49 Furthermore, defendant Madison County argues that the circuit court abused its

discretion in granting class certification in a case where the plaintiffs are incapable of stating

an actionable claim against Madison County. As a threshold matter, class certification is

improper where the putative class representative cannot state a valid cause of action against

the defendant. Barbara's Sales, Inc. v. Intel Corp.,

(2007). In the present

case, Madison County was named in two of the counts in the class-action complaint: sale in

26 error and money had and received. Madison County argues that the plaintiffs cannot

maintain a valid cause of action for either claim against Madison County.

¶ 50 A claim for sale in error is a statutory action arising under section 21-310 of the

Property Tax Code (35 ILCS 200/21-310 (West 2012)). The claimant seeking a sale in error

is generally asking the circuit court to undo the sale of a specific parcel's taxes for an

enumerated reason. See 35 ILCS 200/21-310(a), (b) (West 2012). Subsections (a) and (b)

specifically address who can file a sale in error claim: subsection (a) discusses the county

collector applying for a sale in error, while subsection (b) addresses the owner of the

certificate of purchase applying for a sale in error. 35 ILCS 200/21-310 (a), (b) (West 2012).

¶ 51 Madison County argues that the plaintiffs, as the property owners and not the tax

purchasers, cannot recover under the plain language of the sale in error statute. In support of

this position, Madison County cites In re Application of the County Collector for Judgment

of Sale Against Lands & Lots Returned Delinquent for Nonpayment of General Taxes for the

Year 1979 & Prior Years,

(1988), which held that the sole person

who is interested in a refund of tax-sale money and therefore the only one who can make

representations to the county clerk to induce a sale in error is the tax purchaser. Madison

County also cites La Salle National Bank v. Hoffman,

(1971), which

concluded that sale in error relief is not granted at the insistence of the property owner who

ought to have paid the taxes for which the real estate was sold. In addition, Madison County

argues that a sale in error cannot occur where a property has been redeemed, a requirement

that cannot be satisfied by any of the plaintiffs. See 35 ILCS 200/21-310(d), 22-35, 22-50

(West 2012). 27 ¶ 52 The plain language of the statute allows the county collector and the owner of a

certificate of purchase to seek a sale in error. There is nothing in the statutory language

allowing the delinquent property tax owner to bring a statutory sale in error cause of action

against the county. Although the plaintiffs argue that they can move in equity to set aside the

tax sale pursuant to West Suburban Hospital Medical Center v. Hynes,

(1988), we note that the plaintiffs did not move for class certification on the basis of

equity. Instead, the plaintiffs sought monetary damages within the confines of the statute.

Further, unlike West Suburban Hospital Medical Center, the plaintiffs did not claim that the

underlying assessment of the property taxes by Madison County was improper or

unauthorized by law. Accordingly, we find that the plaintiffs cannot state an actionable

statutory claim for sale in error against Madison County and Prenzler, in his official capacity

as the current treasurer, and, as a result, the claim cannot be certified as part of the class

action.

¶ 53 Madison County next argues that the plaintiffs cannot state an actionable claim for

money had and received. A cause of action for money had and received is maintainable

where defendant has received money that in equity and good conscience belongs to the

plaintiff. Drury v. County of McLean,

(1982). A money had and

received claim is an equitable action and is similar to a claim for unjust enrichment.

; Belden v. Perkins,

(1875). The plaintiffs in the present case have

alleged no facts suggesting that Madison County retained any money as a result of the

alleged conspiracy. Madison County acknowledged that in order for a delinquent property

tax owner to redeem his property, the owner was required to pay the outstanding property 28 taxes as well as the penalty amount to the county clerk. However, Madison County

explained that it did not retain a benefit from the alleged conspiracy in that once a

redemption payment was made, it was passed along to the tax purchaser. We agree with

Madison County that a money had and received claim cannot be brought against an entity

that was a pass through for the redemption payment and received no unjust benefit from

those payments. Thus, we conclude that the plaintiffs cannot maintain a valid cause of

action against Madison County for money had and received. Accordingly, we conclude that

the circuit court abused its discretion in granting class certification as to the sale in error and

money had and received claims against Madison County.

¶ 54 In summary, we conclude that, whereas a class certified for liability purposes would

not be an abuse of the circuit court's discretion, a class certified for liability as well as

damages would be, as the individualized damage determinations will predominate over the

common issues of establishing liability. Thus, the class certification remains as to liability,

but we partially decertify the class for the individual damages determination in light of the

need for individualized proof. In addition, the court abused its discretion in certifying a class

that included the sale in error claim against Madison County and Prenzler and money had

and received claim against Madison County. Accordingly, we vacate the court's certification

order as it applies to the sale in error claim alleged against Madison County as well as

Prenzler and the money had and received claim alleged against Madison County, as these

claims should be dismissed. The cause is remanded to the circuit court for further

proceedings in accordance with the views expressed.

29 ¶ 55 Affirmed in part; vacated in part; and remanded.

30

NO. 5-15-0282 IN THE APPELLATE COURT OF ILLINOIS FIFTH DISTRICT _____________________________________________________________________________________

SCOTT BUEKER, VIRGIL STRAETER, and ) Appeal from the RICHESON REAL ESTATE, LLC, ) Circuit Court of ) Madison County. Plaintiffs-Respondents, ) ) v. ) No. 13-L-276 ) MADISON COUNTY, ILLINOIS; FRED BATHON; ) KURT PRENZLER, in His Official Capacity ) as Madison County Treasurer; JIM FOLEY; ) ALAN J. DUNSTAN; MARK VON NIDA; BARRETT ) ROCHMAN; KENNETH ROCHMAN; BLUE ) SKY VINEYARDS, LLC; CDBR, LLC; SABRE ) GROUP, LLC; SI SECURITIES, LLC; DENNIS ) BALLINGER, JR.; EMPIRE TAX CORPORATION; ) VISTA SECURITIES, INC.; JOHN VASSEN; ) JOSEPH VASSEN; V.I. INC.; SCOTT McLEAN; ) LAND OF LINCOLN SECURITIES, LLC; PRAIRIE ) STATE SECURITIES, LLC; ROBERT LUKEN; ) LUKEN INVESTMENT CO.; SCOTT SIERON; ) RAVEN SECURITIES, INC.; ILLINOIS MOBILE ) HOMES, LLC; ILLINOIS REALTY GROUP ) HOLDINGS, LLC; ILLINOIS REALTY GROUP, ) LLC; JOHN W. SCOTT; EDWARD BEASLEY; RLI ) INSURANCE CO.; and WESTERN SURETY ) COMPANY, ) ) Defendants ) ) (Madison County, Illinois; Jim Foley; Barrett ) Rochman; Kenneth Rochman; Blue Sky Vineyards, ) LLC; CDBR, LLC; Sabre Group, LLC; SI Securities, ) LLC; Dennis Ballinger, Jr.; Empire Tax Corporation; ) Vista Securities, Inc.; John Vassen; Joseph Vassen; ) V.I. Inc.; Scott Sieron; Raven Securities, Inc.; ) Illinois Mobile Homes, LLC; Illinois Realty Group ) Honorable Holdings, LLC; and Illinois Realty Group, LLC, ) William J. Becker, Defendants-Petitioners). ) Judge, presiding.

_____________________________________________________________________________________

Opinion Filed: September 7, 2016 _____________________________________________________________________________________ Justices: Honorable Thomas M. Welch, J. Honorable S. Gene Schwarm, P.J., and Honorable Melissa A. Chapman, J., Concur _____________________________________________________________________________________

Attorneys Andrew R. Kasnetz, Timothy C. Sansone, Natalie J. Kussart, Michele L. Parrish, for Sandberg, Phoenix & von Gontard, P.C., 600 Washington Avenue, 15th Floor, Appellants St. Louis, MO 63101-1313 (attorneys for Blue Sky Vineyards, LLC, CDBR, LLC, Barrett Rochman, Kenneth Rochman, Sabre Group, LLC, SI Securities, LLC);

Gordon B. Nash, Daniel J. Delaney, Drinker Biddle & Reath LLP, 191 North Wacker Drive, Suite 1698, Chicago, IL 60606 (attorneys for Dennis Ballinger, Jr., Empire Tax Corporation, Vista Securities, Inc.);

Paul T. Slocomb, Hoffman & Slocomb, 1115 Locust Street, Suite 400, St. Louis, MO 63101 (attorneys for V.I. Inc., John Vassen, Joseph Vassen);

Alvin C. Paulson, Attorney at Law, 5111 West Main Street, Belleville, IL 62226 (attorneys for Illinois Mobile Homes, LLC, Illinois Realty Group Holdings, LLC, Illinois Realty Group, LLC, Raven Securities, Inc., Scott Sieron);

Craig L. Unrath, Heyl, Royster, Voelker & Allen, 300 Hamilton Blvd., P.O. Box 6199, Peoria, IL 61601-6199; Michael D. Schag, Patrick D. Cloud, Ann C. Barron, Heyl, Royster, Voelker & Allen, 105 West Vandalia, Suite 100, P.O. Box 467, Edwardsville, IL 62025 (attorneys for James Foley, Madison County, Illinois) _____________________________________________________________________________________

Attorneys Steven C. Giacoletto, Giacoletto Law Office, P.C., 30 Summer Tree Lane, for Collinsville, IL 62234; Aaron G. Weishaar, Boris A. Kaupp, Reinert, Weishaar & Appellees Associates, P.C., 812 North Collins, Laclede's Landing, St. Louis, MO 63102; Nelson L. Mitten, Paul A. Grote, Riezman Berger P.C., 7700 Bonhomme Avenue, Seventh Floor, St. Louis, MO 63105 (attorneys for Scott Bueker, Richeson Real Estate, LLC, Virgil Straeter) _____________________________________________________________________________________